Valkyrie Investments Offers To Run Grayscale Bitcoin Trust After Fir Tree Accuses The ETF Of Mismanagement

Fir Tree Partners, a significant shareholder of the Grayscale Bitcoin Trust GBTC, accused Grayscale Investments of continuing to "obfuscate the facts" and "refusing to provide clear information to GBTC shareholders" in a lawsuit filed by Fir Tree last month.

The lawsuit was filed in the Delaware Court of Chancery for "potential mismanagement and conflicts of interest" at Grayscale's flagship Bitcoin BTC/USD fund.

In a statement, Fir Tree said, "Most concerning of all is that Grayscale has once again failed to acknowledge that it has the power to open redemptions and create liquidity for its investors, yet is choosing not to do so."

Valkyrie Investments, an investment firm, presented an offer to take over the operations of the Grayscale Bitcoin Trust at a lower annual fee of 0.75%. Valkyrie's co-founder and CIO Steven McClurg stated that it, along with other shareholder groups including RedeemGBTC.com, Fir Tree and others, can call for a proxy vote to replace the current sponsors and elect Valkyrie to manage the company.

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Fir Tree accused Grayscale of creating the impression that its decision to not allow redemptions was driven by regulatory concerns, when in reality, Grayscale could allow redemptions "at any time, provided GBTC is not simultaneously creating and redeeming shares."

Fir Tree also criticized Grayscale for denying "virtually every allegation" in the complaint and for failing "to take responsibility for the issues it created."

Fir Tree said it was committed to "ensuring that Grayscale is held accountable for these issues and finally begins to act in the best interests of all shareholders."

A Grayscale spokeswoman termed the lawsuit as baseless and without merit, and that the conversion of GBTC to an ETF was the best long-term product structure for investors.

“We look forward to clarifying the numerous mischaracterizations about our company and products in the Delaware Court of Chancery," Pensions & Investments reported the spokeswoman as saying.

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Photo: Andreanicolini via Shutterstock