Saturday, April 13, 2024

Osprey Funds Sues Grayscale Investments Over Bitcoin ETF.

Osprey Funds has filed a lawsuit against Grayscale Investments for allegedly violating the Unfair Trade Practices Act. It alleged that the digital currency asset management company maintained its leading position through deceit.

According to the lawsuit, Grayscale has been able to maintain to date about 99.5% market share only because of its false and misleading advertising and promotion. The firm has a dominant share in a two-participant market despite charging more than four times the asset management fee that Osprey charges for its services.

Osprey highlighted that Grayscale promoted participation in its Grayscale Bitcoin Trust (GBTC) as a means of accessing a spot-based Bitcoin ETF through the conversion of its $12 billion GBTC. The digital asset manager said Grayscale showed the conversion as a foregone conclusion knowing that access was never likely to happen. Osprey claims Grayscale continued to call the conversion “likely”. But such a description was false as the Securities and Exchange Commission had rejected the possibility of such conversion for a Bitcoin commodity fund.

It said Grayscale’s statements in emails, press releases, Twitter, and the company’s executives’ television appearances contained false information. It should be noted that SEC officially denied Grayscale’s application to convert GBTC into an ETF on June 29. But Grayscale had filed a petition for review in the District of Columbia Court of Appeals and the court is expected to hear arguments in the case on March 7.

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