Osprey Funds has requested a review from a Connecticut state court judge regarding a decision that favored Grayscale Investments in their $2 million unfair trade lawsuit related to Osprey's Bitcoin fund. Osprey's motion, filed on February 10, argues that Judge Mark Gould's ruling, issued on February 7, came too early in the discovery process and improperly broadened a legal exemption under the Connecticut Unfair Trade Practices Act. The lawsuit, initiated in January 2023, claimed that Grayscale misrepresented the conversion of its Bitcoin Trust to an ETF as inevitable, misleading investors. The judge's ruling stated that the suit involved issues of buying and selling securities, which are exempt from the act. Osprey contends that the ruling ignored key distinctions in advertising practices and claimed its case focuses on Grayscale's deceptive advertising practices diverting market share rather than mere securities transactions. Osprey recently sought SEC approval to convert its own Bitcoin Trust into a spot Bitcoin ETF, pushing back against a previous failed merger with Bitwise.

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