- BitGo claims $100 M in damages in breach of contract.
- Galaxy reasons it on the non-compliance from BitGo.
BitGo, a crypto custody firm, has filed a lawsuit for $100 million against Galaxy Digital, an investment management firm in a breach of its acquisition deal.
Galaxy was to acquire BitGo for a deal of $1.2 B in stocks and cash. According to BitGo, the breach was intentional, whereas Galaxy contends that it abandoned the deal owing to “BitGo’s failure to deliver, by July 31, 2022, audited financial statements for 2021 that comply with the requirements of our agreement.”
BitGo had agreed to sign the deal in May 2021, only upon the addition of a clause for a $100 million breakup fee, as there were a few other firms at the time interested in acquiring BitGo.
In their tweet on Tuesday they also cited Brian Timmons, a partner with Quinn Emanuel, the law firm which represents BitGo, saying, “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”
Galaxy CEO Mike Novogratz contends otherwise, saying that the allegations presented by BitGo are without merit and that dropping out of this deal does not incur any termination fees.
In the light of Galaxy’s Q2 2022 losses, BitGo further argues, “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’s financial statement was released just a week before they terminated the deal.