The ongoing fight between digital asset investment firm Galaxy Digital and BitGo continues to ramp up. Two weeks ago, on Aug. 15, Galaxy announced it was terminating its $1.2 billion acquisition of BitGo. Galaxy claims the institutional digital asset services company failed to deliver audited financial statements for 2021, as required in the agreement from last May.
BitGo fired back and says Galaxy Digital improperly terminated the deal, which wasn't scheduled to expire until the end of this year. Also it claims it's owed a $100 million reverse break fee that Galaxy promised in March 2022 to extend the merger agreement. Galaxy Digital says there's no required termination fee.
BitGo hired law firm Quinn Emanuel to pursue legal action. Quinn Emanuel partner R. Brain Timmons asserts that Galaxy is only backing out because it recorded a $550 million loss this past quarter stemming from the LUNA crash. "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," Timmons stated.
BitGo CEO Mike Belshe dismissed Galaxy's concerns over the company's financials. He noted BitGo ended 2021 with $64 billion in assets in custody. He claimed client growth tripled over the year, momentum he says has continued into 2022.
"I have never been more bullish about our future," Belshe said.
Galaxy Digital Looks Forward
Meanwhile, Galaxy Digital plans to reorganize as a Delaware-based company. It also seeks Nasdaq listing, dependent on the SEC and Nasdaq exchange reviews and approvals. Galaxy Digital stock currently trades on the Toronto Stock Exchange.
The company is also rolling out its own in-house digital asset investing service for institutional clients, called Galaxy One Prime. "We are committed to continuing our process to list in the U.S. and providing our clients with a prime solution that truly makes Galaxy a one-stop shop for institutions," CEO Mike Novogratz said.
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