After more than two years of legal back-and-forth, digital asset managers Grayscale Investments and Osprey Funds have reached a settlement in their legal dispute concerning the marketing of Bitcoin exchange-traded funds (ETFs). A recent filing with the Connecticut Appellate Court, dated April 9, reveals that both parties have agreed to resolve the matter privately and now have up to 45 days to finalize the settlement terms and documentation.
The lawsuit, initially filed in January 2023, accused Grayscale of misleading investors about the likelihood of converting its flagship product, the Grayscale Bitcoin Trust (GBTC), into an ETF. Osprey, a smaller competitor that also operates a Bitcoin trust, argued that Grayscale engaged in deceptive promotional practices in violation of Connecticut’s Unfair Trade Practices Act (CUTPA).
According to court documents, tensions escalated after Grayscale secured approval from the U.S. Securities and Exchange Commission (SEC) in January 2024 to convert its Bitcoin Trust into a spot Bitcoin ETF—a significant milestone that gave Grayscale a competitive edge. In response, Osprey amended its complaint, arguing that Grayscale had falsely advertised its regulatory progress in the lead-up to the ETF approval.
While Grayscale denied any wrongdoing, the legal battle grew more complex with both sides trading allegations. Grayscale at one point countersued, accusing Osprey of engaging in similar unfair marketing strategies. However, Grayscale voluntarily dropped those counterclaims before the case reached a resolution.
In a February 2025 decision, Connecticut Superior Court Judge Mark Gould sided with Grayscale, ruling that CUTPA did not apply to matters involving securities, effectively dismissing Osprey’s main argument. The judgment marked a significant win for Grayscale, but the legal chapter wasn’t entirely closed—Osprey appealed the decision shortly afterward.
Now, with both sides indicating they’ve reached an agreement, the legal process is being paused to allow time for the settlement terms to be formalized. Although the financial details and specific conditions of the agreement remain confidential, the move likely puts an end to one of the more publicized disputes in the crypto asset management space.
Interestingly, Osprey had previously offered to settle the case for approximately $2 million in July 2024, an offer that Grayscale declined at the time. Whether the final agreement reflects that figure or includes other terms is not yet known. No public statements have been made by either company regarding the outcome, and it’s also unclear whether the settlement includes any admission of liability.
As both firms move past this contentious chapter, they remain active players in the increasingly competitive landscape of crypto investment products, particularly as the market for Bitcoin ETFs continues to expand.