A competitor of Grayscale Investments has sued the cryptoasset manager, claiming Grayscale has misled investors about its services in an effort to steal market share.
In a suit filed Monday in Connecticut Superior Court, Osprey Funds alleges Grayscale engaged in “deceptive acts and unfair competition” in the asset management industry.
“Grayscale has made materially false and misleading statements in its advertising and promotion to the effect and in substance that turning its bitcoin asset management services into access to a bitcoin ETF was a foregone conclusion, when it knew that access was never likely to happen,” the complaint states.
A spokesperson for Osprey Funds declined to comment beyond the filing. A Grayscale representative did not immediately return a request for comment.
The Monday filing comes after Osprey CEO Greg King earlier this month called his company the “best-positioned third party” to manage GBTC in an open letter addressed to Digital Currency Group (DCG) CEO Barry Silbert.
DCG is the parent company of Grayscale Investments, which has operated GBTC since its 2013 launch. The trust now has roughly $14.6 billion in assets and imposes a 2% management fee.
Grayscale is seeking to convert GBTC to an ETF — a process that executives have said would essentially eliminate the roughly 40% discount at which the vehicle currently trades.
The company sued the SEC in June after it chose to block GBTC from becoming an ETF. That case crawls on, as the cryptoasset manager called out the regulator for “illogical” reasoning in its latest brief earlier this month. Oral arguments are set for March 7.
Grayscale CEO Michael Sonnenshein said in December if the company is unsuccessful in converting GBTC to an ETF, the firm would consider a tender offer.
Osprey operates its own bitcoin trust, which has $64 million in assets. The trust carries a fee of 0.49%.
Hedge fund firm Fir Tree Partners sued Grayscale in December in an effort to explore what it alleges to be potential “mismanagement” of GBTC. Grayscale told Blockworks the suit is “baseless and without merit.”
This is a developing story.
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