After more than two years of protracted litigation, the two digital asset managers Grayscale Investments and Osprey Funds have unexpectedly reached a settlement agreement. This is the latest development in the legal battle surrounding the marketing strategies and competitive products of Bitcoin ETFs, which has attracted significant attention in the cryptocurrency investment community.
⚖️ Two-year legal battle between Grayscale and Osprey
The lawsuit began in January 2023 when Osprey Funds, based in Fairfield, Connecticut, filed a lawsuit against Grayscale Investments, accusing the competitor of misleadingly promoting the process of converting the Bitcoin Trust (GBTC) to an ETF.
Osprey manages the OBTC fund – also a type of Bitcoin Trust but with a much smaller market share – claiming that Grayscale violated the Connecticut Unfair Trade Practices Act (CUTPA) through misleading advertising.
📈 Breaking point: Grayscale receives 'green light' from SEC to convert GBTC to ETF
The lawsuit escalated after #Grayscale received SEC approval in January 2024 to convert GBTC into a publicly traded ETF, ending the prolonged legal battle between Grayscale and the U.S. Securities and Exchange Commission (SEC).
Immediately after, Osprey amended the lawsuit, alleging that Grayscale had misled investors about the actual process and the likelihood of SEC approval, in order to gain an unfair advantage over competitors in the field.
🧾 Judge dismisses Osprey's allegations
By February 2025, Judge Mark Gould of the Connecticut Supreme Court dismissed the lawsuit from #Osprey , ruling that the CUTPA law does not apply in cases related to securities and issued a ruling entirely in favor of Grayscale.
Previously, Grayscale had also filed counterclaims against Osprey with similar allegations but voluntarily withdrew these counterclaims before the court issued a final ruling.
Notably, in July 2024, Osprey had previously proposed a settlement for about $2 million, but Grayscale declined.
🤝 Surprise 'handshake' after the appeal
However, on April 9, 2025, a document filed with the Connecticut Supreme Court revealed that the two parties unexpectedly reached a settlement agreement after Osprey filed an appeal of the February ruling.
In a document submitted to the court, the attorney stated:
"Immediately after the appeal was filed, the parties reached a settlement agreement. They now have 45 days or less to finalize and implement the terms of the agreement."
Thus, the process of withdrawing the appeal will only take place after the completion of the documentation and the execution of the settlement terms.
💰 Financial terms remain a mystery
Currently, the specific terms of the agreement, including any payments or acknowledgment of liability, have not been disclosed. Both Grayscale and Osprey have yet to issue official statements regarding this agreement, and media outlets have not received responses from the two companies.
📊 Impact on the Bitcoin ETF market and Binance users
The legal battle between Grayscale and Osprey is part of the fierce competition among digital asset managers to dominate the first Bitcoin ETF market share in the U.S. Grayscale is currently the prominent name with GBTC, holding the largest market share, especially after successfully converting to an ETF.
The announcement of the settlement agreement at this time may pave the way for:
Osprey refocused on the plan to convert OBTC to ETF, something they are still pursuing.
Reducing tension and legal issues in the Bitcoin ETF industry, helping investors feel more secure.
Enhancing the credibility of cryptocurrency-based investment products, especially among traditional investors considering entering the market through ETFs.
For Binance users and the global market, healthy competition and clear legal standing between major financial institutions like Grayscale and Osprey enhance transparency, thereby positively impacting sentiment and investment flows into crypto-related products.
📌 Summary
After years of litigation over tense allegations, Grayscale and Osprey have chosen to settle the dispute with a discreet settlement agreement, opening a new chapter for both in the fierce Bitcoin ETF game.
While Grayscale has made significant progress with the GBTC ETF, Osprey may take this time to intensify efforts to convert OBTC, keeping pace with the general trends of the traditional financial market as it gradually opens up to cryptocurrencies.
🔻 Risk warning: Cryptocurrency and related products such as Bitcoin ETFs carry many risks and high volatility. Investors need to conduct thorough research, assess their risk tolerance, and only use reputable platforms like Binance for trading. This is not investment advice. #anhbacong