October 1, 2023


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Osprey sues Grayscale for misrepresenting likelihood of GBTC ETF approval

2 min read

Digital asset supervisor Osprey Funds filed go well with in opposition to Grayscale Investments in Connecticut Superior Court docket on Jan. 30, alleging violation of the state’s Unfair Commerce Practices Act. The go well with issues Grayscale promoting and promotion of the Bitcoin (BTC) exchange-traded fund (ETF) it’s in search of to create. 

Osprey stated within the go well with that it’s the solely competitor to Grayscale on the over-the-counter traded Bitcoin belief asset administration market, and Grayscale maintained its main place via deceit:

“Solely due to its false and deceptive promoting and promotion has Grayscale been capable of preserve up to now roughly 99.5% market share in a two-participant market regardless of charging greater than 4 instances the asset administration charge that Osprey expenses for its providers.”

Particularly, Osprey alleged that Grayscale promoted participation in its Grayscale Bitcoin Belief (GBTC) as a way of accessing a spot-based Bitcoin ETF via the conversion of its $12-billion GBTC. Grayscale introduced the conversion as “a foregone conclusion, when it knew that entry was by no means more likely to occur,” in accordance with the go well with.

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Osprey alleged that Grayscale continued to name the conversion “‘seemingly,’ regardless of understanding that such an outline was false, because the SEC had constantly rejected the opportunity of such conversion for a Bitcoin commodity fund since in or earlier than late 2020.” Osprey claimed that statements in emails, press releases and Twitter, in addition to Grayscale executives’ tv appearances, contained the false data.

America Securities and Alternate Fee officially denied Grayscale’s application to transform its GBTC into an ETF on June 29, 2022. Grayscale filed a petition for evaluation within the District of Columbia Court docket of Appeals the identical day. The court docket is expected to hear oral arguments within the case on March 7.

Grayscale is a part of Digital Forex Group, which also owns Genesis Global Capital, the crypto lender that declared chapter on Jan. 19. Osprey has additionally seen exhausting instances lately. It has reportedly laid off 15 staff members since final summer time, leaving it with a employees of lower than 10. Osprey is in search of an award for damages from Grayscale and injunctive aid.