Galaxy Digital Holdings and the company’s CEO and founder Mike Novogratz announced the company has “exercised its right to terminate” a previously announced acquisition of Bitgo. According to Galaxy the termination of the deal was due to Bitgo’s “failure to deliver” audited financial statements for 2021.
Galaxy Ends Deal With the Crypto Custodian Bitgo
On Monday, Galaxy Digital Holdings (TSX: GLXY) explained that the company has terminated a proposed $1.2 billion stock and cash deal that would allow the crypto firm to acquire the digital asset custody business and financial services provider Bitgo. Galaxy’s announcement details that the abandoned deal was due to Bitgo’s “failure to deliver” specific financial documents.
“[Galaxy] exercised its right to terminate its previously announced acquisition agreement with Bitgo following Bitgo’s failure to deliver, by July 31, 2022, audited financial statements for 2021 that comply with the requirements of our agreement,” the crypto company detailed. “No termination fee is payable in connection with the termination.”
The news follows Galaxy’s exposure to the Terra blockchain implosion and the company’s founder Mike Novogratz addressing the LUNA subject in mid-May. The letter Novogratz wrote explained that “there is no good news in what happened in markets or to the Terra ecosystem,” but reminded investors of the core tenets of investing like taking profits along the way, and risk management. Novogratz stressed at the time that Galaxy Digital kept to the core tenets when it came to its investments in LUNA.
Mike Novogratz Says ‘Galaxy Remains Positioned for Success,’ Company Still Plans to Be Listed on Nasdaq
During the announcement on Monday, the Galaxy CEO noted that his company is positioned for success. “Galaxy remains positioned for success and to take advantage of strategic opportunities to grow in a sustainable manner,” Novogratz said on Monday in a statement. “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 added.
Additionally, Galaxy noted that it still plans to list the company’s shares on Nasdaq following the completion of a Securities and Exchange Commission (SEC) review. “As previously announced, Galaxy intends to complete the proposed reorganization and domestication to become a Delaware-based company, and subsequently list on the Nasdaq, upon completion of the SEC’s review and subject to stock exchange approval of such listing,” Galaxy said.
Bitgo Reacts to Galaxy Digital’s Statements, Company’s Attorney Says Galaxy’s Attempt to ‘Blame the Termination on Bitgo Is Absurd’
After the announcement Galaxy Digital made on Monday, concerning the terminated acquisition of Bitgo, the Palo Alto, California-based crypto financial services said Galaxy was “legally responsible for its improper decision to terminate the merger.” Bitgo details that it has hired the Los Angeles-based litigation firm Quinn Emanuel “to take appropriate legal action.”
Quinn Emanuel is one of the world’s top-ranking global white shoe law firms with roughly 23 offices located in a myriad of countries. After Galaxy’s press release had published, R. Brian Timmons, a partner with Quinn Emanuel, spoke about the issues between both companies.
“The attempt by Mike Novogratz and Galaxy Digital to blame the termination on Bitgo is absurd,” Timmons wrote in a statement. “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, 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.”
What do you think about Galaxy terminating its deal with the crypto custodian Bitgo? What do you think about Bitgo’s reaction to the news? Let us know what you think about this subject in the comments section below.