Galaxy, BitGo Battle in Court Over Failed $1.2 Billion Deal
Summary
- Galaxy Digital and BitGo are continuing a court battle over responsibility for a roughly $100 million breakup fee.
- BitGo argues that Galaxy concealed matters related to investigations by US authorities and failed to make reasonable best efforts to complete the deal.
- BitGo is maintaining its demand for a $100 million reverse breakup fee or greater legal damages, and the case is drawing attention as a potential leading example of the scope of liability in M&A agreements between large crypto firms.
Galaxy Digital and crypto custody firm BitGo are continuing a court battle over responsibility for a roughly $100 million breakup fee after their planned $1.2 billion merger collapsed.
Bloomberg reported on May 22 that BitGo argued at trial that Galaxy failed to use reasonable best efforts to complete the transaction and concealed matters related to investigations by US authorities. BitGo said those issues may have affected the deal's chances of closing.
Galaxy announced in 2021 that it would acquire BitGo for about $1.2 billion. Under the agreement, BitGo co-founder and Chief Executive Officer Mike Belshe was set to join Galaxy as vice chairman and a board member.
Galaxy terminated the acquisition agreement in August 2022, saying BitGo had failed to provide its audited 2021 financial statements by the contractual deadline. The company also argued that it had no obligation to pay a termination fee.
BitGo, for its part, has maintained that Galaxy must pay a reverse breakup fee of at least $100 million. Since 2022, BitGo has held to its position that it will seek that amount or greater legal damages.
The lawsuit is drawing attention as a potential leading case on the scope of liability in M&A agreements between large crypto firms.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
