BitGo Going Ahead With $100 Million Dollar Lawsuit Against Galaxy Digital
The digital asset custodian BitGo is filing a lawsuit against crypto investment firm Galaxy Digital, making right on its commitment to seek $100 million in damages after Galaxy pulled out of its planned acquisition of the company.
The company filed the suit on Monday, announcing via Twitter this morning. BitGo committed to the lawsuit in August, just weeks after the acquisition deal had fallen through with GalaxyDigital citing “BitGo's failure to deliver, by July 31, 2022, audited financial statements for 2021 that comply with the requirements of our agreement.”
“Late yesterday, BitGo filed a lawsuit against Galaxy Digital seeking damages of more than $100 million arising from Galaxy’s improper repudiation and intentional breach of its merger agreement with BitGo,” the firm tweeted today.
BitGo is represented by attorney Brian Timmons of the firm Quinn Emanuel, with the sealed lawsuit filed in Delaware’s Chancery Court. The firm claims that the case is sealed due to its commitment to giving BitGo a chance to redact any potentially sensitive information in the coming days. The company said that it should be available to view soon after the end of the business day on Thursday.
The deal was earlier announced in May for $1.2 billion. The acquisition of BitGo was supposed to close by the end of this year; however, the recent termination announcement cites BitGo’s inability to show financial statements for 2021 as the primary reason for the deal going awry. “Galaxy remains positioned to succeed and take advantage of strategic opportunities to grow sustainably. We are committed to continuing our process to list in the U.S. and providing our clients with a prime solution that truly makes Galaxy a one-stop shop for institutions,” said Mike Novogratz, CEO, and Founder of Galaxy.
“BitGo, the market leader in digital asset financial services, today said that it intends to hold Galaxy Digital legally responsible for its improper decision to terminate the merger agreement with BitGo, which was not scheduled to expire until December 31, 2022, at the earliest and not to pay the $100 million reverse break fee it had promised back in March 2022 to induce BitGo to extend the merger agreement.” The statement further adds
Galaxy Digital—which was founded by billionaire CEO Mike Novogratz—recently posted a $554 million loss in Q2 2022, which was announced one week before the firm terminated the BitGo acquisition.
This legal battle between two industry juggernauts seems to be just heating up, this is the first for the industry as it has never had two crypto-specific companies caught in litigation. Itll be interesting to see if any laws come from this suit.