- SEC has rejected Grayscale’s attempts to establish Bitcoin ETFs.
- Osprey’s attorneys argued that their client should be compensated.
Osprey Funds, a digital asset manager, has sued Grayscale Investments, the operator of the biggest Bitcoin trust, in a U.S. court. Alleging that Grayscale Investments lied about the trust’s potential to convert into an exchange-traded fund (ETF).
In court filings filed in Connecticut Superior Court. Osprey, which manages a competing Bitcoin trust (OBTC), claimed that its rival had participated in “unfair and deceptive acts and unfair competition in the asset management industry.”
Furthermore, it claims that Grayscale has been promoting the GBTC. On the premise that it would be converted into an ETF for Bitcoin at some time in the future.
SEC Maintains Its Stance
The Securities and Exchange Commission (SEC) has rejected Grayscale’s and other companies’ attempts to establish Bitcoin exchange-traded funds (ETFs). The U.S. authority has not given its clearance to the introduction of any cryptocurrency ETF as of yet.
However, Osprey is now saying that Grayscale management understood allowing investors access to a Bitcoin ETF was “never likely to happen.” Despite Grayscale’s persistent opposition to the decision and calls for the SEC’s reasons to be “illogical.”
Moreover, according to the complaint, Grayscale “launched campaign after campaign” to convince shareholders that an ETF conversion was “inevitable.” Grayscale was aware that the information was false.
Osprey also argues that Grayscale’s 99.5% market dominance in a space where it is the sole competitor is the result of “false and misleading advertising and promotion.” Moreover, Osprey’s attorneys argued that their client should be compensated for lost revenues. And fees as a consequence of Grayscale’s actions.
