BitGo Sues Novogratz’s Galaxy Digital for $100M After Scrapped Acquisition

Digital asset custodian BitGo has filed a lawsuit against crypto investment firm Galaxy Digital, following through on its announced plan to seek more than $100 million in damages after Galaxy pulled out of its planned acquisition of the company.

BitGo filed the suit late Monday, the company tweeted this morning. The firm previously stated in August that it would do just that, shortly after Galaxy Digital axed the deal citing “BitGo’s failure to deliver, by July 31, 2022, audited financial statements for 2021 that comply with the requirements of our agreement.”

“Late yesterday, BitGo filed a lawsuit against Galaxy Digital seeking damages of more than $100 million arising from Galaxy’s improper repudiation and intentional breach of its merger agreement with BitGo,” the firm tweeted today.

BitGo said that it filed the lawsuit in Delaware’s Chancery Court, with attorney Brian Timmons of firm Quinn Emanuel claiming that it was sealed to give the company a chance to redact any potentially sensitive information in the coming days. The company said that it should be available to view soon after the end of the business day on Thursday.

Galaxy Digital announced plans to acquire BitGo in May 2021 in a $1.2 billion deal consisting of cash and stock. However, the deal still hadn’t closed more than a year later, prompting questions ahead of Galaxy’s mid-August announcement about terminating the deal.

BitGo claimed that Galaxy Digital owed a $100 million termination fee, while Galaxy Digital said that it would not incur a fee by pulling out of the deal. Galaxy Digital—which was founded by billionaire CEO Mike Novogratz—recently posted a $554 million loss in Q2 2022, which was announced one week before the firm terminated the BitGo acquisition.