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BitGo sues Galaxy Digital for $100M- Deciphering the reasons

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BitGo sues Galaxy Digital for $100M- Deciphering the reasons

Cryptocurrency custody firm BitGo has sued the crypto financial services firm Galaxy Digital, seeking more than $100 million in damages for allegedly breaching its $1.2 billion merger. The lawsuit has been filed in the Delaware Chancery Court.

Galaxy Digital announces the deal

It was in May last year that Galaxy announced its intention to acquire BitGo in order to provide cryptocurrency trading services to institutional investors.

The deal was expected to bring 400 new clients to Galaxy Digital. An aggregate transaction value of approximately $1.2 billion was established at the time.

Galaxy Digital had decided to retain BitGo employees, besides offering employment agreements to the management team members. At that point in time, it was expected that the deal would close by the fourth quarter of 2021.

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But in August this year, Galaxy Digital announced the termination of its deal to acquire BitGo as it claimed that BitGo had failed to deliver audited financial statements for 2021 by 31 July 2022. It also said that the termination won’t incur the company any fee.

Mike Novogratz, Galaxy CEO, and founder had said that the company remained committed to continuing its process to get listed in the United States.

The statement also revealed that Galaxy intended to complete its proposed reorganization and domestication to become a Delaware-based company and get listed on Nasdaq upon completion of the Securities and Exchange Commission’s (SEC) review and subject to stock exchange approval of such listing.

BitGo alleges Galaxy’s Q2 2022 losses

BitGo soon refuted the claims of Galaxy Digital, saying that the former had submitted the audited 2021 statements to the latter. Quinn Emanuel, BitGo’s litigation partner said,

“It is public knowledge that Galaxy reported a $550 million loss this past quarter, that its stock is performing poorly, and that both Galaxy and Mr. Novogratz have been distracted by the Luna fiasco. 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.”

Galaxy Digital, however, stated that BitGo’s claims were without merit. Calling the termination of the deal “absurd,” BitGo declared its intention to sue Galaxy.

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Galaxy Digital had, indeed, reported a net loss of $554,720 for Q2 2022 as per its financial statement. The crypto crash had ruined all the companies across the globe and Galaxy was no exception.

Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot’s writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S – There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

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17 companies

Bittrex, Merkle Science, Bitgo Join Crypto Market Integrity Coalition

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Bittrex, Merkle Science, Bitgo Join Crypto Market Integrity Coalition

Following the introduction of the Crypto Market Integrity Coalition (CMIC) with 17 member firms last February, the organization has added eight new members. New coalition recruits include Bittrex, Merkle Science, Crystal Blockchain and Bitgo.

8 Crypto Market Firms Join Crypto Market Integrity Coalition to Improve Self-Regulation

Seven months ago, 17 crypto firms announced the formation of the Crypto Market Integrity Coalition (CMIC), a group that aims to bolster a sensibly-regulated crypto industry. Original CMIC members included Circle, Coinbase, Anchorage Digital, Huobi Tech, Liberty City Ventures, and the Chamber of Digital Commerce.

“Through the pledge, the coalition seeks to send an unequivocal message at this critical moment in the evolution of digital assets: The crypto industry has made enormous strides to improve market integrity in the past few years,” the CMIC launch announcement noted on February 7, 2022.

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On Thursday, CMIC detailed that eight new members have joined the coalition. Newly added CMIC members include Bittrex, VAF Compliance, Merkle Science, Tokenomy, Crystal Blockchain, Finclusive, Oasis Pro Markets, and Bitgo. The chief compliance officers (CCOs) at Bitgo and Bittrex spoke about joining the CMIC initiative.

Michael Carter, the chief compliance officer at Bittrex said the crypto exchange looks forward to “working with fellow coalition members on collective educational efforts and sharing insights that will contribute to the industry’s continuing evolution.” Jeff Horowitz, Bitgo’s chief compliance officer detailed that Bitgo welcomes discussions with regulators and policymakers.

“We’re seeing increasing appetite on the part of institutional investors to actively participate in the growing digital asset economy, and regulatory clarity will address concerns that have stemmed from uncertainty,” Horowitz said on Thursday during the CMIC announcement. “We continue to welcome discussion with policymakers on how to encourage innovation while protecting investors and businesses,” the Bitgo

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17 companies, 8 companies, Anchorage Digital, BitGo, Bittrex, Circle Internet Financial, CMIC, Coinbase, Crypto Market Integrity Coalition, Cryptocompare, Crystal Blockchain, Finclusive, Huobi Tech, investor protection, Jeff Horowitz, Merkle Science, Michael Carter, Oasis Pro Markets, prevent manipulation, Public confidence, the Chamber of Digital Commerce, Tokenomy, VAF Compliance

What do you think about the eight crypto companies that recently announced joining the Crypto Market Integrity Coalition? Let us know what you think about this subject in the comments section below.

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Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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1.2 billion

Bitgo Files Lawsuit Against Novogratz’s Galaxy Digital For $100M Over ‘Intentional Breach’ Of A Merger Agreement

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Bitgo Files Lawsuit Against Novogratz’s Galaxy Digital For $100M Over ‘Intentional Breach’ Of A Merger Agreement

According to statements made by the digital asset custody business and financial services provider Bitgo, the firm has filed a lawsuit against the crypto company Galaxy Digital and is seeking damages for more than $100 million. Bitgo says Galaxy’s “improper repudiation and intentional breach of its merger agreement” caused the lawsuit.

Bitgo Seeks Damages From Galaxy Digital for Terminated Merger Agreement

On August 16, 2022, Bitcoin.com News reported on billionaire investor Mike Novogratz’s Galaxy Digital terminating the company’s proposed acquisition deal for the crypto asset financial services provider Bitgo. Galaxy originally had intentions in May 2021 to purchase Bitgo for a $1.2 billion stock and cash deal. However, Galaxy said that the termination was due to Bitgo’s “failure to deliver” specific financial documents. More specifically, “audited financial statements for 2021” as Galaxy alleges that Bitgo did not turn this information in on a specific date.

Immediately after Galaxy announced it terminated the deal via a press release, Bitgo reacted to the company’s allegations. In a press release published by Bitgo, the company stressed that Galaxy Digital was “legally responsible for its improper decision to terminate the merger.” Bitgo’s announcement on September 13 details that the lawsuit aims to address Galaxy’s alleged “improper repudiation and intentional breach of its merger agreement.” Bitgo is working with the Los Angeles-based litigation firm Quinn Emanuel and the litigation firm’s partner Brian Timmons said:

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Although Bitgo does not believe that the complaint contains any confidential information, it was filed in Delaware Chancery Court under seal in an abundance of caution in the event.

Bitgo also said that Galaxy “contends otherwise and wishes to redact some of the allegations before the complaint becomes public.” However, if some of the information is redacted, the complaint should still be “accessible by the public shortly after 5 pm ET on Thursday.”

Bitgo believes the company is owed $100 million due to termination fees, and many crypto supporters have been following the story closely. “Will be interesting to see what the details of the allegations are,” one person replied to Bitgo’s Twitter post on Tuesday.

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1.2 billion, BitGo, Bitgo legal action, crypto custodian, custodian, Delaware-based company, Galaxy, Galaxy announcement, Galaxy CEO, Galaxy Digital, GLXY, legal action, LUNA, Mike Novogratz, nasdaq, Nasdaq Listing, Quinn Emanuel, R. Brian Timmons, SEC, SEC review, stock exchange, Terra Blockchain, TSX: GLXY

What do you think about Bitgo filing a lawsuit against Galaxy Digital for $100 million over an alleged breached contract? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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BitGo

BitGo sues Galaxy Digital for $100M over broken merger agreement

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BitGo sues Galaxy Digital for $100M over broken merger agreement

BitGo sues Galaxy Digital for $100M over broken merger agreement Monika Ghosh · 7 hours ago · 1 min read

After agreeing to acquire BitGo for $1.2 billion, Galaxy Digital backed out saying it never received BitGo’s audited financials.

1 min read

Updated: September 13, 2022 at 4:14 pm

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Cover art/illustration via CryptoSlate

Cryptocurrency staking firm BitGo filed a lawsuit against Galaxy Digital on Sept. 12 seeking damages of over $100 million for breaching the merger agreement, BitGo announced on Twitter.

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.

— BitGo (@BitGo) September 13, 2022

In May 2021, Galaxy Digital announced that it had agreed to acquire BitGo for $1.2 billion in stocks and cash. Both companies’ boards approved the transaction.

However, on Aug. 15, 2022, Galaxy Digital announced that it was terminating the acquisition plan. Galaxy Digital said that BitGo had failed to comply with the terms of the agreement, which required it to submit audited financial statements for 2021 by July 31, 2022. The firm further stated that “no termination fee is payable” in the case.

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But BitGo’s lawyers claim that the firm honored all its obligations, including the delivery of the audited financial reports. R. Brian Timmons, a partner with Quinn Emanuel, the law firm representing BitGo, said in the Aug. 15 press release:

“The attempt by Mike Novogratz and Galaxy Digital to blame the termination on BitGo is absurd.”

According to BitGo’s statement in August, Galaxy Digital had committed to paying a reverse break fee of $100 million in March 2022 in order to persuade BitGo to extend the merger agreement. At the time, Timmons had said that Galaxy Digital owes BitGo the promised $100 million termination fee, or “it has been acting in bad faith and faces damages of that much or more.”

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