Galaxy and BitGo Clash in Court Over $100M Failed Crypto Deal

TLDR

• BitGo and Galaxy Digital faced each other in court this week over their failed merger, according to Bloomberg.
• BitGo is seeking at least $100 million from Galaxy after the company terminated the deal in August 2022.
• The failed transaction was once valued at $1.2 billion when Galaxy announced the acquisition plan in May 2021.
• BitGo claims Galaxy did not use reasonable efforts to complete the merger agreement.
• BitGo also alleges that Galaxy withheld details about U.S. authority probes that could have affected the deal.

BitGo and Galaxy Digital faced each other in court this week over the failed $1.2 billion crypto merger, Bloomberg reported. BitGo is seeking at least $100 million after Galaxy ended the deal in August 2022. The case centers on whether Galaxy used reasonable efforts to complete the acquisition and whether it withheld details about U.S. probes.

BitGo Presses $100 Million Crypto Claim in Court

BitGo told the court that Galaxy failed to take reasonable steps to close the transaction. Bloomberg reported that BitGo also accused Galaxy of hiding details about U.S. authority probes.

Those alleged probes, BitGo argued, likely affected Galaxy’s ability to complete the merger. The dispute now returns to a deal that once ranked among the larger crypto acquisitions.

Galaxy Digital announced plans to buy BitGo in May 2021. The transaction carried a stated value of about $1.2 billion at the time.

Under the original plan, BitGo co-founder and CEO Mike Belshe would join Galaxy. He was also expected to become Galaxy’s deputy CEO and a board member.

The courtroom clash comes roughly four years after the acquisition plan first became public. It also extends a legal fight that has continued since the deal collapsed in 2022.

Bloomberg said BitGo wants Galaxy to pay at least $100 million. BitGo has said since 2022 that it would pursue that fee or seek higher legal damages.

The case places Michael Novogratz, Galaxy’s billionaire founder and CEO, at the center of the dispute. It also revives questions about one of crypto’s most closely watched failed mergers.

Galaxy Defends Its Decision After Ending the BitGo Deal

When Galaxy walked away in August 2022, it cited BitGo’s 2021 audited financial statements. Galaxy said BitGo failed to deliver those statements by July 31, 2022.

Galaxy also said those statements did not meet the requirements of the merger agreement. Because of that, Galaxy maintained that no termination fee was owed.

BitGo rejected that position and moved toward legal action. The company argued that Galaxy still owed the $100 million fee or larger damages.

The legal dispute has unfolded while the digital asset market faced wider pressure. During that period, crypto firms dealt with tighter regulation and falling market prices.

Still, the case before the court focuses on the merger agreement itself. The issue is whether Galaxy had valid grounds to terminate the acquisition.

Bloomberg reported that BitGo claims Galaxy’s conduct breached its obligations under the deal. Galaxy, however, has relied on BitGo’s audit delivery as its stated reason for ending it.

The latest factual update is that the two companies appeared in court this week. Bloomberg reported that BitGo is pursuing at least $100 million as the legal battle continues.

The post Galaxy and BitGo Clash in Court Over $100M Failed Crypto Deal appeared first on CoinCentral.