Grayscale and Osprey End 2-Year Legal Clash Over Bitcoin ETF

Yigit Taha OZTURK — Fri, 11 Apr 2025 10:30:28 +0000

Grayscale Investments and Osprey Funds have agreed to settle their lawsuit involving alleged violations in the promotion of Bitcoin ETF products. According to an April 9 filing with the Connecticut Appellate Court, both parties are finalizing the documentation and fulfilling the settlement terms. After that, Osprey will withdraw its appeal.

“Soon after this appeal was filed, the parties reached a settlement of this case,” the court filing stated. “It is expected that all these tasks can be done within 45 days.”

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The terms of the settlement have not been made public.

From Market Rivals to Courtroom Adversaries

Osprey accused Grayscale of misleading advertising by promoting its Grayscale Bitcoin Trust (GBTC) as if conversion to a spot ETF was guaranteed, despite regulatory uncertainty at the time.

“Grayscale’s messaging misled the market,” Osprey had claimed in its original lawsuit.

However, in January 2024, the SEC officially approved GBTC’s conversion into a spot ETF, and the product began trading on NYSE Arca.

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The post Grayscale and Osprey End 2-Year Legal Clash Over Bitcoin ETF appeared first on Coin Engineer.

Osprey Seeks Review of Lawsuit Against Grayscale

Tanju Akbıyık — Tue, 11 Feb 2025 07:45:41 +0000

Crypto asset management company Osprey Funds has applied to a Connecticut state court to review the court’s ruling in its favor in its $2 million unfair trade lawsuit against Grayscale Investments.

Objection to Court Decision

Osprey filed a motion for reconsideration with the Connecticut Supreme Court on February 10. The company claims that Judge Mark Gould issued his February 7 ruling “without completing the evidentiary process” and “expanding the boundaries of an exemption under the Connecticut Unfair Trade Practices Act (CUTPA).”

In January 2023, Osprey filed a lawsuit against Grayscale and Delaware Trust Company, the manager of its flagship Bitcoin mutual fund (GBTC). In the lawsuit, Osprey alleged that Grayscale lured investors to its fund with misleading advertising and presented the conversion to an ETF as a foregone conclusion.

However, in his February 7 ruling, Judge Gould ruled in Grayscale’s favor, stating that Osprey’s charges related to securities trading, which is exempt from CUTPA law.

Osprey’s Defense and the Future of the Case

In its new petition to the court, Osprey argued that the decision did not take into account the issues of “unfair competition and misleading advertising”.

The company also argued that it had not entered into any securities transactions with Grayscale, and therefore their lawsuit should not be considered a securities transaction. Osprey claimed that the real subject of the lawsuit was the damage to its market share due to Grayscale’s aggressive and misleading marketing tactics.

While this lawsuit was pending, Osprey filed with the SEC to convert its Bitcoin mutual fund (OBTC) into a spot Bitcoin ETF in January 2024. Osprey, which had previously been in merger talks with Bitwise, has turned to an independent ETF process after that deal fell through.

It remains to be seen how the court will respond to Osprey’s appeal and how the company, which competes with Grayscale, will be affected by this case.