Galaxy Digital first stated the proposed acquisition of the crypto custody firm BitGo in May 2021 at a valuation of $1.2 billion. But by March 2022, Galaxy announced a delay in the acquisition as the companies renegotiated the term of transfer.
On August 15, Galaxy Digital abandoned its plan to acquire BitGo because the company was not financial transparency. Since BitGo has breached the deal that Galaxy can walk away without paying the termination fee.
Mike Novogratz, CEO and Founder of Galaxy stated:
“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.”
Confronting huge loss because of the market downtrend
The news follows Galaxy’s Q2/2022 financial report. Accordingly, the file recorded a net loss of $554.7 million due to the decline in digital asset prices.
As of June 30, 2022, Galaxy still had a solid $1.5 billion liquidity position as per the earnings call. As such, Novogratz maintained positivity about the company’s recent performance:
“I am proud of Galaxy’s outperformance during a challenging market and macroeconomic environment. Prudent risk management, along with our commitment to exacting credit standards, allowed us to maintain over $1.5 billion in liquidity, including over $1 billion in cash,” he said, adding that the firm was in a “strong position to weather prolonged volatility.”
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