BitGo will sue Galaxy Digital for $100 million over the aborted acquisition

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Last Updated on August 16, 2022 by Bitfinsider

Galaxy Digital is being sued for more than $100 million, according to digital asset custodian BitGo, who claims the investment company owes the money as part of a “reverse break fee” for terminating an acquisition agreement.

In a blog post on Monday, BitGo referred to Galaxy’s conduct as “improper,” accusing it of breach of contract for canceling a deal to buy the custodian of digital assets. In order to take legal action against Galaxy for failing to pay a “$100 million reverse break fee it had promised back in March 2022,” BitGo has retained the services of the law firm Quinn Emanuel.

According to Galaxy, BitGo allegedly failed to deliver audited financial accounts for 2021 by July 31, 2022 in accordance with the acquisition agreement. Quinn Emanuel partner R. Brian Timmons refuted this assertion: “The attempt by Mike Novogratz and Galaxy Digital to blame the termination on BitGo is absurd. 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.”

In May 2021, as part of its ambitions to launch in the US, Galaxy declared its aim to buy BitGo. The acquisition was anticipated to close between Q2 and Q4 2022 after a delay towards the end of the first quarter of 2022, during which Galaxy CEO Mike Novogratz stated that the company had “adjusted the deal some.”

Whether the recent market collapse played a role in the deal possibly falling through, it is unclear. Initially, Galaxy claimed it would make a payment of about $1.2 billion in cash and stock in 2021. At the end of 2021, BitGo reported that it had more than $64 billion in assets under custody, and that “client growth continues into 2022.”


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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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