Galaxy Digital, a popular crypto investment firm run by billionaire Mike Novogratz, announced it has dropped an agreement to acquire BitGo. According to Galaxy, BitGo breached the contract as it failed to provide audited financial statements for 2021 by July 31, 2022. Galaxy also said that they will not be charged any fees for canceling this agreement.
In response, BitGo referred to Galaxy’s actions as improper and the reason for the termination given by this firm is unreasonable. BitGo will take legal action against Galaxy Digital and seek at least $100 million in damages. “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”, BitGo said.
Galaxy first revealed its plan to acquire BitGo last May as part of its plans to go public in the United States. If the deal is successful, it would become one of the biggest deals in the crypto space, bringing Galaxy 400 new global customers and geographic expansion. A year after the acquisition announcement and numerous delays, Galaxy is expected to complete the deal by the end of this year. But now, the $1.2 billion acquisition has officially come to an end.
Despite that, Galaxy Digital continues to pursue its plan to seek public listing in the US. “Galaxy remains positioned for success and to take advantage of strategic opportunities to grow in a sustainable manner. 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”, Novogratz CEO said.
Back last week, Galaxy reported a loss of more than half a billion dollars in the second quarter of 2022 on crypto investments. Despite the loss, the firm continues to raise capital and keep an eye on many potential M&A deals.
Although the crypto winter has taken a toll, Galaxy reportedly still holds $1.5 billion in liquidity, mostly in cash, at the end of June. Galaxy is also about to launch a new product called Galaxy One Prime for institutional investors that will integrate trading, lending, and derivatives services.
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