According to statements from digital asset custodian and financial services provider Bitgo, the company has filed a lawsuit against crypto company Galaxy Digital and is seeking damages of more than $100 million. Bitgo claims that Galaxy’s “improper repudiation and intentional breach of its merger agreement” caused the suit.
Galaxy Digital announced plans to acquire BitGo in a $1.2 billion cash-and-stock deal in May 2021. However, the deal remains unfinished more than a year later. This while raising questions before Galaxy announced it was terminating the deal in mid-August.
The deal was halted in March as Galaxy awaited an SEC ruling on its proposed restructuring into a Delaware company. In addition, Mike Novogratz’s company, recently announced a $554 million loss in the second quarter of 2022. This was a week before it closed its acquisition of BitGo.
Bitgo, more than $100 million in damages
Indeed, on August 16, 2022, Bitcoin.com News reported that billionaire investor Mike Novogratz’s Galaxy Digital had terminated the company’s proposed acquisition deal for crypto asset financial services provider Bitgo. However, Galaxy said the termination was due to the “failure to deliver” specific financial documents from Bitgo. Specifically, the “audited financial statements for 2021,” as Galaxy alleges that Bitgo failed to provide this information by a specific date.
Immediately after Galaxy announced the termination of the agreement via a press release, Bitgo responded to the company’s allegations.
In a press release issued by Bitgo, the company noted that Galaxy Digital was “legally responsible for its poor decision to terminate the merger.”
BitGo’s tweet reads:
“Late yesterday, BitGo filed a lawsuit against Galaxy Digital seeking more than $100 million in damages resulting from Galaxy’s wrongful repudiation and intentional breach of its merger agreement with BitGo.”
Bitgo is working with Los Angeles-based litigation firm Quinn Emanuel and litigation partner Brian Timmons said:
While Bitgo does not believe the complaint contains confidential information, it was filed with the Delaware Chancery Court under seal in an abundance of caution in this case.
Bitgo also said that Galaxy “contends otherwise and wishes to redact some of the allegations before the complaint becomes public.” However, if some of the information is redacted, the complaint should still be “publicly available shortly after 5 p.m. ET on Thursday.”
Bitgo believes the company is owed $100 million due to the termination fee, and many crypto supporters have been following the story closely. “It will be interesting to see what the details of the allegations are,” one person responded Tuesday to Bitgo’s Twitter post.