Alameda Research Drops Grayscale Lawsuit; Coinbase Criticizes GAO Report; Terraform Labs Files for Bankruptcy
Summary:
Alameda Research has withdrawn its lawsuit against Grayscale Investments following Grayscale's successful conversion of its Bitcoin Trust to a spot ETF. In another development, Coinbase’s chief legal officer has criticized the U.S. GAO over its recent crypto report, accusing it of insufficient analysis. Meanwhile, Terraform Labs, the creator of the now-defunct stablecoin TerraUSD, has filed for Chapter 11 bankruptcy protection in the U.S.
In a startling turn of events, Alameda Research has rescinded its lawsuit against Grayscale Investments just days after the asset manager successfully transitioned its Grayscale Bitcoin Trust into a spot ETF. At the same time, Paul Grewal, the chief legal officer at Coinbase, has criticized the U.S. Government Accountability Office (GAO) over a recent crypto report, accusing it of negligence in research and analysis. In an unrelated development, a bankruptcy protection under Chapter 11 has been filed by Terraform Labs, a company founded by Do Kwon.
Alameda Research, affiliated with the now-defunct FTX hedge fund, chose to dismiss a lawsuit it had lodged against Grayscale Investments just under a fortnight after the Grayscale Bitcoin Trust was transformed into a spot ETF. In a written communique to Cointelegraph, a Grayscale spokesperson stated, “We can confirm that Alameda Research has of its own accord dismissed the lawsuit against Grayscale, supporting our stance that the entire legal action was devoid of any validity.”
Despite the absence of a specified reason for the withdrawal, the Bitcoin Trust of Grayscale continues to witness significant outflows, which have played a role in restraining the price of Bitcoin. Initially, the lawsuit launched by Alameda Research in March 2023 aimed to get a court order objecting to Grayscale's management fees imposition.
Simultaneously, criticisms were levelled by Paul Grewal, Coinbase's chief legal officer, at the U.S. GAO for a recently published report on how cryptocurrencies could potentially be used to dodge sanctions. According to Grewal, the report provided no actual analysis, while repeatedly criticizing an industry that diligently complies with the law.
Interestingly, in the report that censures cryptocurrencies for enabling malefactors to circumvent sanctions, the GAO admitted that the decentralised and public character of cryptocurrencies could potentially help U.S. agencies and analytics firms trace transactions and identify illegal actors.
In another development, Terraform Labs, the creator of the now obsolete stablecoin TerraUSD, has filed for Chapter 11 bankruptcy protection in the U.S. The firm has reported liabilities and assets ranging between $100 million and $500 million, as per their filing on January 21.
Chris Amani, CEO of Terraform Labs, in a separate statement said, “This action was essential for us to be able to persevere in our efforts toward achieving our common objectives while sorting out outstanding legal issues." Although the company has faced numerous challenges, the ecosystem managed to thrive and grow despite them.
This bankruptcy filing event took place just four days after Do Kwon's upcoming fraud trial was postponed to March 25 by the U.S. SEC, based on a delay request tendered by Kwon's legal representatives. This news piece does not offer any investment advice or suggestions, and all investment or trading moves inherently come with risks. Readers are encouraged to perform thorough research before making any decisions.
Published At
1/22/2024 10:53:25 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.