Hedge Fund Sues Crypto Asset Manager to Obtain Details on Bitcoin Trust

A hedge fund sued Grayscale Investments, LLC for failing to provide information relating to the management of one of its funds, Grayscale Bitcoin Trust ("GBTC").

In the Complaint filed in the Court of Chancery of the State of Delaware, the hedge fund argued that Grayscale failed to comply with the hedge fund's request for information relating to (i) the business and financial condition of GBTC, (ii) GTBC's books of account and governing documents and (iii) the personal information of other beneficial owners.

The hedge fund alleged that Grayscale failed to provide reasonable justification for denying shareholders the right to redeem shares of GBTC. The hedge fund also argued that Grayscale's fee system was unfair, given management fees based on the value of GBTC's actual Bitcoin holdings instead of the market price of the shares. At the time, GBTC shares were trading at approximately a 40 to 45 percent discount, according to the Complaint.

The hedge fund seeks to block Grayscale from appealing the SEC's decision to deny the listing of a GBTC ETF, arguing that Grayscale is using the pursuit as justification to continue denying share redemptions. Additionally, the hedge fund is seeking relief in the form of (i) an order requiring Grayscale to provide the requested information, (ii) reasonable attorneys' fees and expenses in connection with this action and (iii) any other relief the Court deems appropriate.