Grayscale resolves lawsuit with Fir Tree over proposed changes to Bitcoin Trust

July 11, 2023 Coin Telegraph

Fir Tree hinted at potential additional litigation against Grayscale and parent company Digital Currency Group based on what its GBTC documentation may reveal.

Grayscale Investments has reached an agreement with New York-based investment firm Fir Tree Capital Management over its Bitcoin Trust.

According to a July 11 announcement from Fir Tree, Grayscale agreed to provide additional documentation related to its Bitcoin Trust (GBTC) after Fir Tree filed a lawsuit in December 2022. The complaint against Grayscale aimed at having the asset manager stop plans to turn its GBTC trust into a spot exchange-traded fund (ETF) and provide documentation on its relationship with Digital Currency Group, Grayscale’s parent company.

Fir Tree claimed that roughly 850,000 retail investors had been “harmed by Grayscale’s shareholder-unfriendly actions” based on the firm’s lack of a redemption program from GBTC into cash or crypto. In addition, its legal team said Grayscale attempting to launch a spot crypto ETF could “cost years of litigation, millions of dollars in legal fees, countless hours of lost management time, and goodwill with regulators.”

“Once Grayscale provides Fir Tree with the GBTC documents that it has agreed to produce under this agreement, we will be able to further investigate Grayscale in order to determine our appropriate next steps, which may include filing additional litigation against Grayscale, Digital Currency Group (DCG), and their respective directors, officers, and advisors, or others who should be held accountable for destroying billions of dollars of GBTC’s market value,” said Fir Tree.

Grayscale filed a legal challenge against the United States Securities and Exchange Commission (SEC) in June 2022 after the regulator denied an application to convert its Bitcoin Trust into a spot Bitcoin (BTC) ETF. The lawsuit is ongoing, with the SEC having not approved any spot crypto investment vehicle despite applications pending from BlackRock and other investment firms.

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Fidelity and Nexo are entering institutional lending market

December 7, 2021 Coin Telegraph

bitcoin investment trust

The collaboration aims to give institutions access to digital assets with new innovative product designed specifically for their needs.

Fidelity Digital Assets — the crypto wing of Fidelity Investments — and crypto borrowing and exchange platform Nexo have announced a partnership to offer crypto custodial services, products and lending services for institutional investors.

The two firms will create a comprehensive product line and legal infrastructure for institutional investors looking to get exposure to cryptocurrencies.

The partnership with Fidelity Digital Assets will allow Nexo to extend its asset portfolio and add a second custody level to its security architecture, according to an announcement. It also enables Fidelity Digital Assets institutional investors access to Nexo's services as well as crypto prime brokerage.

Kalin Metodiev, co-founder and managing partner at Nexo, commented on the development saying:

“Working with Fidelity Digital Assets is the latest milestone in our quest to offer a complete institutional platform and to onboard traditional finance companies into the digital asset ecosystem. Our client base will now have full use of our industry-leading credit and trading products with reliance on Fidelity Digital Assets’ bespoke custody and security solutions.”

Christopher Tyrer, head of Fidelity Digital Assets in Europe, said that the firm has seen significant growth in institutional investor interest on the continent, and has expanded its partnerships in order to meet that demand.

Fidelity Investments has been ambitious in its plans for the institutional cryptocurrency market, making a number of strategic hires in the space. The company appears to be taking a more holistic approach to cryptocurrency, as the asset manager seeks to provide more institutional access points.

First Midwest Bank Trust Division increases Grayscale Bitcoin Trust holdings by 283%

July 8, 2021 Coin Telegraph

bitcoin investment trust

A report on the firm's holdings to the SEC for Q2 2021 revealed the bank's trust division had 29,498 shares in Grayscale's Bitcoin Trust, worth more than $880,000.

Illinois-based financial services company First Midwest Bank’s trust division has reported it held 29,498 shares of Grayscale’s Bitcoin Trust as of the second quarter of 2021.

According to an institutional investment manager holdings report filed by the First Midwest Bank Trust Division to the U.S. Securities and Exchange Commission, the company increased its shares of Grayscale’s Bitcoin (BTC) Trust by more than 283% over that of the first quarter of 2021, from 7,693 shares at the end of March to 29,498 shares in two separate lots on June 30.

First Midwest reported the holdings were worth $880,000 at the time of filing, but they have since fallen to roughly $803,000. The share price of Grayscale's BTC Trust, or GBTC, has dropped by more than 22% this year, from $35.08 on Jan. 4 to $27.18 at the time of publication. The asset has been trading at a roughly 15 to 20% discount to its Bitcoin holdings.

Cointelegraph reported yesterday that major institutional investment managers were still seemingly showing confidence in cryptocurrency despite recent volatility. Nickel Digital CEO Anatoly Crachilov said 19 listed companies with a market cap of more than $1 trillion “had around $6.5 billion” currently invested in Bitcoin. First Midwest holds $14 billion in assets under management, so its GBTC shares represent less than 0.006% of its AUM.

Grayscale is expected to “unlock” more than 16,000 Bitcoin related to its BTC trust on July 18. Though the investment manager regularly unlocks such funds, the event scheduled in less than two weeks is expected to be the largest, with 16,240 BTC becoming available, or roughly $536 million at the time of publication.

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