Grayscale and Osprey Resolve Two-Year Dispute Over Bitcoin ETFs

Grayscale Investments and Osprey Funds have come to a settlement following their extended legal battle regarding marketing practices.

A motion submitted to the Connecticut Appellate Court on April 9 indicates that the parties are aiming to finalize the settlement documentation within 45 days after Osprey filed an appeal against a February ruling that favored Grayscale.

“Shortly after the appeal was lodged, the parties reached an accord in this matter,” the motion, initially published by Law360, states. Grayscale and Osprey now must “complete the documentation of the settlement” and fulfill the terms before the appeal can be withdrawn.

The lawsuit, initiated in January 2023, focused on claims that Grayscale misrepresented the potential for its Bitcoin Trust (GBTC) to convert into an exchange-traded fund.

Osprey, based in Fairfield and operating its own Bitcoin trust but with a smaller market share, asserted that Grayscale breached Connecticut’s Unfair Trade Practices Act (CUTPA) through allegedly misleading marketing.

Court documents reveal that the dispute with Osprey escalated after Grayscale obtained SEC approval to “uplist” and transition its Bitcoin Trust to an ETF in January 2024, after a lengthy struggle with the regulator.

Osprey later revised its complaint, contending that Grayscale had misled regarding its progress toward ETF conversion, as Osprey continues its efforts to convert its OBTC into an ETF.

Superior Court Judge Mark Gould issued a summary judgment favoring Grayscale on February 7, 2025, determining that CUTPA was not applicable to securities matters.

This verdict followed more than two years of legal activity, which also involved counterclaims from Grayscale alleging comparable unfair practices by Osprey. These counterclaims were ultimately withdrawn prior to the summary judgment, as indicated by the case history.

It is notable that before the February ruling, Osprey had sought to settle the case in July 2024 for approximately $2 million, but Grayscale turned down that proposal.

The financial aspects and other stipulations of the current settlement have not been made public, and it remains uncertain whether the agreement entails any admission of fault from either side.

So far, representatives from both entities have refrained from commenting publicly on the specifics of the current settlement.

Decrypt has attempted to contact Grayscale and Osprey but did not receive a reply by the time of publication.

Edited by Sebastian Sinclair