Grayscale is being sued by Osprey Funds for deceptive advertising on the crypto trustTable of Contents
Grayscale is being sued by Osprey Funds for deceptive advertising on the crypto trust
By CoinUnited.io Research Team
2 min read
In a lawsuit filed against Grayscale on Monday in Connecticut Superior Court, Osprey claimed that the company has been spreading "false and deceptive advertising" about the Grayscale Bitcoin Trust (ticker GBTC) since late 2020. According to the lawsuit, Grayscale acted as though the conversion of GBTC into an exchange-traded fund was a "foregone conclusion," despite the fact that it knew the conversion was highly unlikely. Since Grayscale's application to convert into an ETF was refused by US authorities in June, the company has filed a lawsuit against the Securities and Exchange Commission.
Osprey claims that Grayscale's dominance in the trust-based crypto goods market is attributable to "unfair trade practices," despite the fact that Grayscale's GBTC has a charge that is four times greater than Osprey's equivalent offering. Osprey Investment Management is headquartered in Fairfield, Connecticut, and it manages over $100 million in assets.
Osprey Funds' lawsuit against Grayscale Investments is completely baseless. We believe that converting GBTC to an ETF is the most optimal product structure for Grayscale's investors in the long run, and that the approval of a spot Bitcoin ETF would be of direct value to our competitors. A Grayscale representative stated, "We remain confident in our common sense, convincing legal arguments and we look forward to a definitive judgement from the DC Court of Appeals by Fall 2023."
Osprey's Bitcoin trust was established in 2019, whereas GBTC didn't have its start until 2013.
Osprey had previously pointed out GBTC's huge discount, which is now at 41%, and had announced in early January that it was seeking to be installed as the sponsor of the troubled product in order to induce reforms that may help reduce the difference. It also claimed that it would cut GBTC's management fee from the current 2% if it were in control.
However, GBTC has been criticized for a variety of reasons, including the fact that it trades at a discount and the fact that its parent business, Digital Currency Group, is having financial difficulties (its Genesis lending unit just filed for bankruptcy).
Osprey claims that Grayscale's dominance in the trust-based crypto goods market is attributable to the company's "unfair trade practices," despite the fact that Grayscale's GBTC has a charge that is four times higher than Osprey's equivalent offering. Osprey, situated in Fairfield, Connecticut, manages over $100 million for its assets.
Osprey Funds' lawsuit against Grayscale Investments is completely baseless. We believe that converting GBTC to an ETF is the most optimal product structure for Grayscale's investors in the long run, and that the approval of a spot Bitcoin ETF would be of direct value to our competitors. A Grayscale representative stated, "We remain confident in our common sense, convincing legal arguments and we look forward to a definitive judgement from the DC Court of Appeals by Fall 2023."
Osprey's Bitcoin trust was established in 2019, whereas GBTC didn't have its start until 2013.
Osprey had previously pointed out GBTC's huge discount, which is now at 41%, and had announced in early January that it was seeking to be installed as the sponsor of the troubled product in order to induce reforms that may help reduce the difference. It also claimed that it would cut GBTC's management fee from the current 2% if it were in control.
However, GBTC has been criticized for a variety of reasons, including the fact that it trades at a discount and the fact that its parent business, Digital Currency Group, is having financial difficulties (its Genesis lending unit just filed for bankruptcy).
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