Settlement Agreement Between Grayscale Investments and Osprey Funds
Two prominent digital asset management firms, Grayscale Investments and Osprey Funds, have come to an agreement to settle their ongoing legal battle concerning marketing practices related to their respective Bitcoin trusts. A recent motion presented to the Connecticut Appellate Court indicates that both parties aim to complete their settlement documentation within the next 45 days.
This development comes after Osprey lodged an appeal against a ruling from February that had favored Grayscale. The motion, initially reported by Law360, reveals that following the filing of the appeal, the two firms quickly resolved to settle the issues at hand. Once the necessary documentation is finalized, the appeal by Osprey can be formally withdrawn.
Origin of the Dispute
The dispute originated in January 2023, when Osprey accused Grayscale of misleading investors about the potential for its flagship product, the Grayscale Bitcoin Trust (GBTC), to transform into an exchange-traded fund (ETF). Grayscale, based in Connecticut, faced allegations from Osprey, which operates a smaller Bitcoin trust, asserting that the former engaged in deceptive advertising practices in violation of the Connecticut Unfair Trade Practices Act (CUTPA).
The tension between the companies escalated particularly following Grayscale’s recent SEC approval to convert its Bitcoin Trust into an ETF, a victory that came after protracted negotiations with regulatory authorities. In light of this advancement, Osprey updated its lawsuit, contending that Grayscale had misrepresented its intentions and progress regarding the ETF conversion.
Legal Developments and Settlement Attempts
Despite a drawn-out legal process that included a summary judgment from Superior Court Judge Mark Gould on February 7, 2025, which determined that CUTPA did not extend to securities-related cases, the atmosphere remains charged with legal complexities. Interestingly, early in the litigation, Osprey attempted to settle for approximately $2 million in July 2024, an offer that Grayscale rejected at the time.
Conclusion
While the financial specifics of the newly reached settlement have yet to be disclosed, including any potential acknowledgment of fault by either company, representatives from both sides have refrained from commenting publicly on the situation. Efforts by Decrypt to gather insights from Grayscale and Osprey regarding the agreement have thus far gone unanswered. This resolution puts an end to a significant chapter in the rivalry between the two firms in the burgeoning cryptocurrency market.
