just to note..
alemedia is no longer/not managed now by 'scam bankrupt fraud'
its now managed by independent accountants/lawyera with licence under regulation of bankruptcy law
thus dont think of it as scammy alemeda trying to scam more
think of it as regulated lawyer/accountants reclawing assets using bankruptcy law
keep this in mind as you read what i say next. and any other future alemeda drama
according to the financial times alemeda bought 22m shares of GBTC
so not hot air(they have skin in the game)
part of the FTX/alemeda bankruptcy is to claw back all invested value held elsewhere to liquidate it for repayments to ftx/alemeda customers
so if grayscale are not allowing redemptions. they are preventing the clawbacks of 22m of shares, currently valued today at $12.90/share *22m= $283.8m value
I get that, my point is that the law suit is likely hot air. Ie they have no right to redeem their shares directly from Greyscale, instead have to dump on secondary market. It's all very dodgy, that I'm not denying. I just imagine there's small print covering Greyscale legally right now and effectively investors got what they paid for: shares without the guarantee of redemption until an ETF is approved.
yes normal customers abide by the service agreement of the company. meaning no recourse of redemption becasue they agreed to buy shares that have terms applied
however.
in regards to bankruptcy
if a now bankrupt company deposited illicit/stolen/abused funds into company X. by law that amount needs to be clawed back from company X at the deposited value/price
this then breaches/supersedes any company X service agreement because bankruptcy law reigns superior to business policy
so alemeda liquidators are trying to claw back initial investment from grayscale. not trying to sell shares to open market on OTC
(obviously if the assets were worth more now compared to initial deposit they would happily sell shares on OTC and now use the "claw back" tool of bankruptcy law)
so grayscale has no large overheads/labourcosts of "managing trust"
Apart from to Coinbase Custody that is. At least 1% I imagine as a special deal on a large holding.
(As far as I'm aware Coinbase charge a lot for custody than 2%)
coinbase and grayscale are not real customers of each other.. they are corporate sisters. thus have different systems and treatment compared to how coinbase treats real customers
EG no point in coinbase charging grayscale 2% if that 2% goes back to DCG
would you charge yourself 2% to yourelf.... nope
grayscale is not offering its promised ETF right now thus there is no overhead/labour cost of running an ETF
Again I doubt they "promised" an ETF, as otherwise everyone would be suing them for failing to provide - not just Alameda.
I otherwise don't see how they would be getting a free service from the likes of Coinbase in a hurry.
cant sue if its "not their fault" grayscale are saying the hold up is due to law/sec. thus not grayscales fault
(although yes grayscale promised an etf)
also grayscale offered the OTX swap of share ownership thus giving users an escape.. although that escape involved passing on the headache to a noob investor
thus grayscale should not be implying that it should take its 2% management fee if its not offering the services that the fee's imply to cover
What they should and shouldn't be doing isn't the point here, it's about the letter of the law. Of course they should have allowed redemptions all along, then there wouldn't be such a discount.
The fee is otherwise the custody of Bitcoin in exchange for shares, so I'd say they are probably entitled to charge what they want for that, it's up to investors to decide whether they feel it's fair, not to determine how much it should cost them. Even if they "shouldn't be" charging a fee, if investors sign contracts accepting such terms, then they have no legitimate claim against Greyscale is bottom line.
yes users signed a user agreement with terms
normal users cant fight it.. heck even grayscales terms say users cant sue them and instead have to use a mediator to arbitrate disputes.
but when it comes to bankruptcy law and the tools available to legally claw back assets. that instance is outside of the business service agreement policy
That might sound harsh, but GBTC holders should really have read the small print here. Just because Greyscale intended to convert GBTC into an ETF, doesn't mean it was/is going to ever happen. In summary, the reason I say the Alameda law suit is hot air is because this isn't about "right and wrong" this is about "legal and illegal", so arguing the former has no place in regards to this court case.
Unless there is some bankruptcy clause in these contracts (which I doubt there is), then Alameda won't be getting a dime from Greyscale. They will just have to suck it up and dump for a 34% discount on secondary market. Of course knowing that they would be getting 50% more value from their holdings is why they are "trying it on" with Greyscale, no other reason imo.
bankruptcy law supersedes business service agreement policy
its not that grayscale needs to put in clauses .. its that bankruptcy law of clawbacks is outside and above grayscales service agreement
now with all that said
the bankruptcy tool of "clawback" is a law that has more power then grayscale business policy
meaning alemeda has a claim to clawback the funds it gave grayscale
however
grayscale "could" use a defense that:
the deposit/investment into grayscale pre-dates the criminal acts of alemeda that resulted/consequential to cause the bankruptcy
in short the investment has no relation/result/cause related to the bankruptcy so are not part of any claw back scope of use of such tool