u.today
Digital asset manager Osprey Funds has slapped rival Grayscale Investments with a lawsuit, accusing the Digital Currency Group subsidiary of exaggerating the chances of its Bitcoin Trust being eventually converted into an exchange-traded fund (ETF).
Grayscale's conduct is "unfair" and "deceptive," according to the plaintiff. At the same time, the defendant argues that the legal action is "frivolous."
The lawsuit mentions that Grayscale promoted the much-coveted conversation as a "foregone conclusion" despite being expectedly rebuffed by the Securities and Exchange Commission (SEC). The firm kicked off several campaigns to persuade investors that its win seemed to be "inevitable" despite allegedly knowing that its message was false.
Grayscale strongly criticized the SEC's rejection, and it continues to fight the decision, calling the regulator's reasoning "illogical."
However, Osprey alleges that Grayscale's false advertising is the reason behind its dominance on the market, with a 99.5% share, leaving Osprey as the only other player.
The plaintiff claims that it has lost management fees and profits to its arch-rival as a result of these practices and is now seeking damages based on the fees and profits it missed out on.
This lawsuit is the latest in a series of legal hurdles faced by Grayscale, with hedge fund Fir Tree filing a lawsuit against the asset manager over GBTC's discount, while Valkyrie launched an activist campaign to unseat Grayscale.
Despite these challenges, GBTC remains one of the largest and most popular Bitcoin funds on the market.