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Grayscale and Osprey end 2-year legal fight over Bitcoin ETF promotion

Asset managers Osprey Funds and Grayscale Investments agreed to settle a lawsuit over alleged violations of Connecticut law in the advertising and promotion of Grayscale’s Bitcoin exchange-traded fund (ETF). 

According to an April 9 court filing, the parties agreed to settle the two-year-old case and are finalizing documentation and settlement terms. The filing noted that once those steps are completed, Osprey will withdraw its appeal.

“Soon after this appeal was filed, the parties reached a settlement of this case,” the motion stated. “It is expected that all these tasks can be done within 45 days, and it is uncertain whether a shorter extension would suffice.”

Details of the settlement have not been made public. 

Grayscale and Osprey reach settlement

The legal battle between the two firms started on Jan. 30, 2023, when Osprey filed a suit in the Connecticut Superior Court. Osprey claimed it was Grayscale’s only competitor in the over-the-counter Bitcoin (BTC) trust market and that Grayscale had maintained its market share through deceit. 

Osprey claimed Grayscale promoted its Grayscale Bitcoin Trust (GBTC) as a means to access a spot Bitcoin ETF through a conversion. Osprey argued that the conversion was presented as a certainty, despite regulatory uncertainty at the time.

Grayscale’s application to convert GBTC into a spot ETF was approved by the US Securities and Exchange Commission in January 2024.

An August 2023 ruling compelled the SEC to reconsider its rejection of Grayscale’s application to convert the fund into an ETF. 

The SEC’s approval allowed GBTC to transition into a spot ETF and begin trading on the NYSE Arca exchange.

Related: Crypto ETPs shed $240M last week amid US trade tariffs — CoinShares

Lawsuit settlement follows Osprey appeal 

On Feb. 7, Judge Mark Gould sided with Grayscale, ruling that Osprey’s claims against the asset manager were exempted from the Connecticut Unfair Trade Practices Act. 

Osprey responded by filing a motion for reargument on Feb. 10. The fund claimed that Gould’s ruling came “before the close of discovery,” which is the formal evidence-gathering phase of a lawsuit.

The fund claimed that the ruling overlooked the differences between how the Federal Trade Commission and Connecticut courts treat deceptive advertising. 

The settlement ended one of the more prominent legal clashes among crypto asset managers competing for early ETF dominance. Grayscale’s GBTC remains one of the largest Bitcoin investment vehicles in the United States.

Magazine: Illegal arcade disguised as … a fake Bitcoin mine? Soldier scams in China: Asia Express

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The three key questions about the China spy case that need to be answered

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The three key questions about the China spy case that need to be answered

The government has published witness statements submitted by a senior official connected to the collapse of a trial involving two men accused of spying for China.

Here are three big questions that flow from them:

1. Why weren’t these statements enough for the Crown Prosecution Service (CPS) to carry on with the trial?

For this prosecution to go ahead, the CPS needed evidence that China was a “threat to national security”.

The deputy national security adviser Matthew Collins doesn’t explicitly use this form of words in his evidence. But he comes pretty close.

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In the February 2025 witness statement, he calls China “the biggest state-based threat to the UK’s economic security”.

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Six months later, he says China’s espionage operations “harm the interests and security of the UK”.

Yes, he does quote the language of the Tory government at the time of the alleged offences, naming China as an “epoch-defining and systemic challenge”.

But he also provides examples of malicious cyber activity and the targeting of individuals in government during the two-year period that the alleged Chinese spies are said to have been operating.

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Witness statements published in China spy trial

In short, you can see why some MPs and ex-security chiefs are wondering why this wasn’t enough.

Former MI6 head Sir Richard Dearlove told Sky News this morning that “it seems to be there was enough” and added that the CPS could have called other witnesses – such as sitting intelligence directors – to back up the claim that China was a threat.

Expect the current director of public prosecutions (DPP) Stephen Parkinson to be called before MPs to answer all these questions.

2. Why didn’t the government give the CPS the extra evidence it needed?

The DPP, Stephen Parkinson, spoke to senior MPs yesterday and apparently told them he had 95% of the evidence he needed to bring the case.

The government has said it’s for the DPP to explain what that extra 5% was.

He’s already said the missing link was that he needed evidence to show China was a “threat to national security”, and the government did not give him that.

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What does China spy row involve?

The newly published witness statements show they came close.

But if what was needed was that explicit form of words, why was the government reticent to jump through that hoop?

The defence from ministers is that the previous Conservative administration defined China as a “challenge”, rather than a “threat” (despite the numerous examples from the time of China being a threat).

The attack from the Tories is that Labour is seeking closer economic ties with China and so didn’t want to brand them an explicit threat.

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Is China an enemy to the UK?

3. Why do these statements contain current Labour policy?

Sir Keir Starmer says the key reason for the collapse of this trial is the position held by the previous Tory government on China.

But the witness statements from Matthew Collins do contain explicit references to current Labour policy. The most eye-catching is the final paragraph of the third witness statement provided by the Deputy National Security Adviser, where he quotes directly from Labour’s 2024 manifesto.

He writes: “It is important for me to emphasise… the government’s position is that we will co-operate where we can; compete where we need to; and challenge where we must, including on issues of national security.”

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In full: Starmer and Badenoch clash over China spy trial

Did these warmer words towards China influence the DPP’s decision to drop the case?

Why did Matthew Collins feel it so important to include this statement?

Was he simply covering his back by inserting the current government’s approach, or was he instructed to put this section in?

A complicated relationship

Everyone agrees that the UK-China relationship is a complicated one.

There is ample evidence to suggest that China poses a threat to the UK’s national security. But that doesn’t mean the government here shouldn’t try and work with the country economically and on issues like climate change.

It appears the multi-faceted nature of these links struggled to fit the legal specificity required to bring a successful prosecution.

But there are still plenty of questions about why the government and the CPS weren’t able or willing to do more to square these circles.

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Trump’s second term fuels a $1B crypto fortune for his family: Report

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Trump’s second term fuels a B crypto fortune for his family: Report

Trump’s second term fuels a B crypto fortune for his family: Report

The Trump family’s crypto ventures have generated over $1 billion in profit, led by World Liberty Financial and memecoins including TRUMP and MELANIA.

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SEC chair: US is 10 years behind on crypto, fixing this is ‘job one’

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SEC chair: US is 10 years behind on crypto, fixing this is ‘job one’

SEC chair: US is 10 years behind on crypto, fixing this is ‘job one’

SEC Chair Paul Atkins said the US is a decade behind on crypto and that building a regulatory framework to attract innovation is “job one” for the agency.

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