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Today, FTX, a digital asset exchange and derivatives trading platform, is taking legal action against Grayscale, the world’s largest digital asset manager. FTX’s trading affiliate, Alameda Research, has filed a lawsuit against Grayscale in the U.S. District Court for the Northern District of California accusing the company of misusing its significant market presence to manipulate the cryptocurrency market.
Alameda filed the lawsuit on June 9, alleging that Grayscale’s dominant position in the industry, including its control over $37 billion in assets, gives it the ability to manipulate the price of digital assets such as Bitcoin and Ethereum. The lawsuit alleged that Grayscale has used its “market power and controlling influence in the cryptocurrency market” to manipulate prices in order to benefit its own funds at the expense of its competitors.
Specifically, Alameda is accusing Grayscale of wrongfully maintaining its Bitcoin Trust by allegedly buying up large amounts of Bitcoin on the open market, causing “artificially inflated prices” in the cryptocurrency market and violating Section 1 of the Sherman Antitrust Act. Alameda is seeking treble damages and equitable relief.
The impact this lawsuit could have on Grayscale, as well as on the cryptocurrency market overall, remains to be seen. In its response to the lawsuit, Grayscale said that it “respectfully disagrees with Alameda’s allegations and intends to vigorously defend against them.”
FTX and Alameda have not yet commented on the lawsuit, but this move could signal an escalation in the competition between them and Grayscale. And, while it’s too soon to tell what the outcome of this lawsuit might be, the case may have profound implications for the crypto economy.