- Hedge fund Fir Tree has sued an investment firm to obtain information about the Grayscale Bitcoin Trust.
- Earlier last month, the Grayscale Bitcoin Trust discount reached its largest gap of 42% from net asset value.
- Grayscale is also fighting the Securities and Exchange Commission over its denial of its application to convert GBTC into an ETF.
Grayscale Investments has a big name in the crypto space, mainly because it is the best bitcoin fund. However, the investment firm’s situation is becoming increasingly unfavorable as it continues to be attacked from all sides one after another. This has caused its market value and Grayscale Bitcoin Trust (GBTC) to drop further.
Grayscale may have mismanaged
Grayscale filed the lawsuit on Wednesday. New York-based hedge fund Fir Tree Capital Management has filed a lawsuit to open an investigation into Grayscale Investments. Through the litigation, Fir Tree will obtain information to investigate potential mismanagement and conflicts of interest by the defendants.
As reported by Bloomberg, the complaint concerns a lawsuit involving books and records. Through it, Fir Tree is seeking court-usable documents against Grayscale to complete his 42% discount to the fund’s net asset value (NAV).
Grayscale Bitcoin Trust Discount on NAV
Fir Tree also raised a finger at Grayscale’s parent company, Digital Currency Group. Digital Currency Group may be interdependent with other businesses such as Grayscale and Genesis Global Trading, the hedge fund said.
In November, Genesis Global Trading also faced a potential downside as it suspended withdrawals. The liquidity crunch by FTX has also created the possibility of filing for bankruptcy.
Grayscale and SEC
On the one hand, Grayscale has taken a beating in court, but on the other hand, it has taken a beating with the Securities and Exchange Commission (SEC). The regulator has repeatedly rejected investment firm requests to convert GBTC into his ETF, making it a target for Grayscale Investments.
As a result, Grayscale filed a lawsuit against the SEC, filing an opening statement on October 12th, alleging that the SEC had treated the spot Bitcoin ETF with “extraordinary severity.” It took months to resolve, but Grayscale was able to start a conversation about the same.