Grayscale sued by competitor Osprey for misleading GBTC investors
|- As of writing, the Grayscale Bitcoin Trust has declined, and the discount increased to 41.33%.
- According to Osprey, Grayscale has been portraying the conversion of GBTC into an ETF as “likely” despite SEC’s rejection.
- Osprey stated that Grayscale had been involved in making false and misleading statements since 2020.
Grayscale has been in a storm of allegations and defenses for months now as the asset management company has become a part of another lawsuit. However, this time, unlike its efforts against the Securities and Exchange Commission (SEC), Grayscale is the recipient of the lawsuit.
Grayscale taken on by Osprey
Osprey Funds, which is known for its Osprey Bitcoin Trust, dragged its competitor, Grayscale, to the court on Monday. The former filed a lawsuit against Grayscale, alleging participation in “unfair and deceptive acts and unfair competition” in the asset management category.
According to Osprey, Grayscale had been advertising and promoting the Grayscale Bitcoin Trust to the effect of GBTC turning into an ETF since 2020.
This amounted to false and misleading statements as, by then, Grayscale had become aware that the conversion of GBTC into an ETF was not on the table. On the same, Osprey stated,
“it [Grayscale] knew that access was never likely to happen. Grayscale also regularly promotes its services as “transparent”, free of certain riks, “secure,” and supported by a “proven track record”, all of which are false and deceptive.”
As per Osprey, these allegedly illegal tactics allowed Grayscale to gain about 99.5% of the market share despite only two competitors in the space.
It is also thanks to these statements that investors are willing to pay more than four times the asset management fee to Grayscale compared to the fees charged by Osprey.
Grayscale vs SEC
Grayscale has been involved in another lawsuit, albeit a major one, against the Securities and Exchange Commission. The asset manager sued the regulatory body over its rejection of the conversion of GBTC into an ETF.
Calling SEC discriminatory, Grayscale stated that by rejecting the request, the regulator exceeded its authority.
Grayscale Bitcoin Trust discount to NAV
On the other hand, the positive market condition, which at one point pushed Bitcoin price above $23,000, also helped GBTC in recovering its premium. Up from the low of 48%, the GBTC premium discount was reduced to 36.28%.
However, in the last few days, the broader market conditions have left GBTC looking at a discount of 41.33%.
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