According to BitGo, the contract is not expiring till 31st December 2022, and Galaxy Digital has to pay a $100 million breakup fee promised in March 2022 “in order to induce BitGo to extend the merger agreement”.
After financial services and investment management firm Galaxy Digital said Monday that it was terminating the acquisition of BitGo, the digital asset trust company has said it will seek a $100 million breakup fee. Galaxy Digital announced its termination plans concerning its acquisition of BitGo in a press release. The purchase process began in 2021 with BitGo announcing that Galaxy Digital had agreed to acquire the crypto custodian for $1.2 billion. The companies revealed that the deal would be complete by the fourth quarter of this year. At the time, the management firm’s CEO Mike Novogratz said the successful agreement would benefit the company. He said the acquisition establishes the company as a “one-stop-shop for institutions and significantly accelerates our mission to institutionalize digital asset ecosystems and blockchain technology.”
Galaxy Digital said it is terminating the acquisition because BitGo has failed to deliver to comply with the requirements. The company said BitGo would provide the audited financial statement for 2021 by 31st July. However, the crypto custodian failed to submit the documents as part of the requirement under the contract. It added in the termination announcement that “no termination fee is payable in connection with the termination.”
BitGo Seeks Over $100M Breakup Fee from Galaxy Digital
BitGo also released a statement in reaction to Galaxy’s Digital announcement to pull out of the acquisition contract. The crypto custodian said it holds Galaxy Digital “legally responsible” for its action. The company said it is suing the investment management company for inappropriately ending the deal. According to BitGo, the contract is not expiring till 31st December 2022, and Galaxy Digital has to pay a $100 million breakup fee promised in March 2022 “in order to induce BitGo to extend the merger agreement”. BitGo has hired law firm, Quinn Emanuel, as it takes legal actions against the management company.
A partner with the law firm, R. Brain Timmons, commented on the termination and breakup fee between BitGo and Galaxy Digital:
“The attempt by Mike Novogratz and Galaxy Digital to blame the termination on BitGo is absurd. BitGo has honored its obligations thus far, including the delivery of its audited financials. It is public knowledge that Galaxy reported a $550 million loss this past quarter, this 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.”
Furthermore, BitGo founder and CEO Mike Belshe stated that the company has been growing over time. He noted that the company has a solid operational and strategic outlook. He mentioned that the crypto custodian ended last year with more than $64 billion in assets in custody.