Grayscale and Osprey Reach Settlement in Legal Dispute
Digital asset managers Grayscale Investments and Osprey Funds have successfully reached a settlement after an extended legal battle regarding their marketing practices. This resolution marks a significant milestone for both parties involved in the cryptocurrency sector.
Details of the Settlement
A motion submitted to the Connecticut Appellate Court on April 9 indicates that both Grayscale and Osprey are looking at a 45-day period to finalize the settlement documentation. This comes after Osprey filed an appeal against a February ruling that favored Grayscale.
Legal Background of the Dispute
The lawsuit, initiated in January 2023, involved allegations that Grayscale misled investors regarding the potential for its Bitcoin Trust (GBTC) to transition into an exchange-traded fund (ETF). Osprey, headquartered in Fairfield, claimed that Grayscale’s marketing violated Connecticut’s Unfair Trade Practices Act (CUTPA) through purportedly deceptive practices.
Escalation After SEC Approval
The legal proceedings ramped up after Grayscale received approval from the SEC to convert its Bitcoin Trust into an ETF in January 2024, following a lengthy regulatory battle. In response, Osprey amended its complaint, asserting that Grayscale’s communications around this progress were misleading. Notably, Osprey is also working towards converting their own Bitcoin Trust (OBTC) into an ETF.
Court Rulings and Prior Settlement Attempts
On February 7, 2025, Superior Court Judge Mark Gould granted summary judgment in favor of Grayscale, ruling that the CUTPA did not extend to securities cases. This case had evolved over more than two years, involving counterclaims from Grayscale that were eventually dropped before the milestone ruling. It’s noteworthy that Osprey had previously attempted to settle the case for approximately $2 million in July 2024, but Grayscale declined the offer.
Current Settlement Conditions
The financial aspects and other specific conditions of the newly reached settlement have not been publicly disclosed. It remains uncertain whether the agreement involves any admission of liability from either Grayscale or Osprey.
Company Statements
Representatives from both Grayscale and Osprey have not yet commented publicly regarding the terms of the settlement agreement. Decrypt has reached out to both companies for insights, but no responses were provided by the time of this report.
