What was supposed to be a blockbuster crypto merger has morphed into a legal brawl. Galaxy Digital said Monday that it has terminated its $1.2 billion bid to buy BitGo, which it accused of failing to produce “audited financial statements."
BitGo quickly hit back, announcing that it plans to sue the crypto financial services company for “its improper decision to terminate the merger agreement.”
Galaxy Digital said it had “exercised its right to terminate” the deal, originally struck in May 2021, after BitGo failed to deliver 2021 financial records “that comply with the requirements of our agreement.” The company also said no termination fee has to be paid.
BitGo denied Galaxy Digital’s claim. R. Brian Timmons, a partner with Quinn Emanuel, which represents BitGo, said the company has “honored its obligations thus far, including the delivery of its audited financials.”
“The attempt by [Galaxy Digital CEO] Mike Novogratz and Galaxy Digital to blame the termination on BitGo is absurd,” Timmons said in a statement.
BitGo said it would seek more than $100 million in damages. BitGo said Galaxy Digital had promised to pay a $100 million “reverse break fee” in March when it tried “to induce BitGo to extend the merger agreement.”
Timmons suggested that Galaxy Digital wanted to end the deal because of recent business troubles. “It is public knowledge that Galaxy reported a $550 million loss this past quarter, that its stock is performing poorly, and that both Galaxy and Mr. Novogratz have been distracted by the luna fiasco,” he said, referring to the failed cryptocurrency whose failure in May hit Galaxy's stock price.
He said Galaxy Digital must pay the termination fee “or it has been acting in bad faith and faces damages of that much or more.”
Novogratz, who is also Galaxy Digital’s founder, said in a statement that it still hopes to “list in the U.S.” and transform the company into “a one-stop shop for institutions.”
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE