Today, Galaxy Digital announced that it would no longer purchase BitGo, which would have been a huge transaction in the cryptocurrency world. Custodian of digital assets BitGo has declared that Galaxy Digital will be held liable for at least $100 million in damages as a result of Galaxy Digital’s withdrawal from an agreement to be acquired by BitGo.
Earlier today, Galaxy Digital announced that it would sever ties with its proposed acquisition of BitGo for $1.2 billion. The company, led by billionaire Mike Novogratz, claimed there would be no fees associated with ending the agreement. Because the merger agreement was not supposed to expire until the end of this year, BitGo is now suing for damages. To Sue Galaxy Digital, it has retained the legal services of Quinn Emanuel.
R. Brian Timmons, a partner with Quinn Emanuel, stated on Monday that “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,”
“Either Galaxy owes BitGo a $100 million termination fee as promised, or it has been acting in bad faith and faces damages of that much or more.”
Over $500 million in losses were reported for the second quarter by Galaxy Digital last week. The New York company claimed that “unrealized losses” on digital assets were to blame for the figures.
The Terra collapse, a well-known blockchain that imploded in May and cost investors billions of dollars, was the subject of BitGo’s “Luna fiasco” remark. A vocal supporter of Terra and its native cryptocurrency, Luna, was Mike Novogratz.
In May of last year, Galaxy first announced that it would buy BitGo. The enormous deal would have brought Galaxy about 400 new international clients, making it one of the biggest in the cryptocurrency industry.
The agreement did not materialize, however, and today Galaxy announced that it was terminating the agreement “following BitGo’s failure to deliver, by July 31, 2022, audited financial statements for 2021 that comply with the requirements of our agreement.”
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