On the 31st of January, Osprey Funds, a digital asset manager, filed a lawsuit in filed to Connecticut’s Superior Court against Grayscale Investments, the largest operator of Bitcoin trust in the world, for unfair practices. In the filing, the digital asset manager wrote that the Bitcoin trust misrepresented the likelihood that it could ever become an ETF, known as an exchange-traded fund.
In the documents filed in the court, Osprey Funds, which also runs a Bitcoin trust OBTC, alleged that its rival Bitcoin trust Grayscale had engaged in unfair and deceptive acts. Grayscale also engaged in an unfair contest in the asset management industry. Osprey accused Grayscale of advertising its Bitcoin Trust, GBTC, on the basis that converting it into a Bitcoin ETF at a certain point in the future was a foregone decision.
Grayscale has already been rebuffed by the SEC, known as the Securities and Exchange Commission when it tried to make a Bitcoin ETF. And the SEC hasn’t approved any crypto ETF for launch in the US. However, Grayscale has also continued to fight the decision, as earlier this month, GBTC called the SEC’s reasoning illogical. But in this latest filing, Osprey wrote that Grayscale managers knew providing investors access to a Bitcoin ETF was never possible to happen. The lawsuit alleges that Grayscale launched campaign after campaign to convince investors that a conversion to an ETF was inevitable. Grayscale knew that this message was false, the lawsuit by OBTC reads.
In the filing, Osprey claimed that supposed false and misleading advertising and promotion of Grayscale is the only reason it has managed to snap up a 99% share of the market. The lawsuit reads that Osprey has lost management fees and returns to Grayscale as a consequence of its unfair trade practices. In the filing, the lawyers of Osprey suggested that the OBTC should be awarded damages based on profits and fees it missed out on as a result of the conduct of Grayscale.