BitGo took to Twitter to confirm that it has filed a $100 million lawsuit against investment management firm Galaxy Digital for terminating an acquisition deal worth $1.2 billion.
“Late yesterday, BitGo filed a lawsuit against Galaxy Digital seeking damages of more than $100 million arising from Galaxy’s improper repudiation and intentional breach of its merger agreement with BitGo,” the crypto custody firm wrote.
Adding that the complaint was filed in Delaware Chancery Court under seal, and should be open to the public shortly after 5 p.m. ET on 15 Sept.
This is how the saga unfolded.
In what seemed to be a landmark deal for the crypto industry quickly headed south when Galaxy August announced that it is backing out from the deal due to a “failure to deliver audited financial statements for 2021,” while exercising “its contractual right to terminate” the cash-and-stock transaction.
“No termination fee is payable in connection with the termination,” the firm had added. The proposed acquisition was the global crypto industry’s first $1 billion deal.
BitGo Vs Galaxy Digital: A Deal Turned Sour
Following that, the digital asset trust firm swiftly responded. Brian Timmons, a partner with Quinn Emanuel law firm, which represents the custodian said,
“BitGo has absolutely delivered the audits that were needed to get this deal done. Galaxy is the one with the problem and it’s saying: It’s not me, it’s you”.
When questioned about BitGo‘s statements, Galaxy spokesman Michael Wursthorn replied, “I can’t speak to their’s statements.”
Galaxy Digital revealed its intention to buy BitGo for $1.2 billion last year. The details of the arrangement, however, were reportedly being renegotiated, The Block reported in March of last year.
Only one week after Galaxy Digital filed a $554 million loss for the second quarter did the failed merger become a public knowledge. Despite the losses, the firm kept raising money with the intention of closing deals.
“BitGo agreed to extend this deal back in March only because Galaxy agreed to a breakup fee,” Timmons said. “Without it, BitGo would never have agreed to the extension. It had other interested suitors.”
According to Galaxy’s Wursthorn, his business has every right to terminate the agreement and that they wont pay a termination fee.
