Crypto Competitors Grayscale and Osprey Settle Two-Year Tussle Over Bitcoin ETFs

Digital asset managers Grayscale Investments and Osprey Funds have reached a settlement agreement after their long-drawn legal dispute over marketing practices.

A motion filed with the Connecticut Appellate Court on April 9 shows the parties are looking at 45 days to finalize settlement documentation after Osprey appealed a February decision favoring Grayscale.

"Soon after this appeal was filed, the parties reached a settlement of this case," a copy of the motion first uploaded by Law360 reads. Grayscale and Osprey would then need to "finish documenting the settlement" and carry out the terms before the appeal can be pulled.

The lawsuit, filed in January 2023, centered on allegations that Grayscale misled investors about the prospects of its Bitcoin Trust (GBTC) converting to an exchange-traded fund.

Fairfield-based Osprey, which operates its own Bitcoin trust albeit with a smaller market share, claimed Grayscale violated Connecticut's Unfair Trade Practices Act (CUTPA) by allegedly deceptive marketing.

Court records show the litigation with Osprey intensified after Grayscale received SEC approval to "uplist" and convert its Bitcoin Trust to an ETF in January 2024, following a protracted battle with the regulator.

Osprey subsequently amended its complaint, arguing that Grayscale misrepresented its progress toward ETF conversion. Osprey is still working to convert their OBTC to an ETF.

Superior Court Judge Mark Gould granted summary judgment to Grayscale on February 7, 2025, ruling that CUTPA did not apply to securities cases.

That judgment came after over two years of legal proceedings, which included counterclaims by Grayscale alleging similar unfair practices by Osprey. These counterclaims were voluntarily dropped before the summary judgment, the case history shows.

It's worth noting that before the February ruling, Osprey had attempted to settle the case in July 2024 for roughly $2 million, but Grayscale declined that offer.

Financial terms and other conditions of the current settlement agreement have not been disclosed, and it remains unclear whether the agreement includes any admission of liability by either party.

Representatives from both companies have not issued public statements regarding the current settlement terms.

Decrypt has reached out to Grayscale and Osprey but did not receive a response by press time.