BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
SUBSCRIBE
BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
BlockNews.com
No Result
View All Result
Home Business

Crypto Custody Firm BitGo Files $100M Lawsuit Against Galaxy Digital for Breaching Merger Agreement

BlockNews Team by BlockNews Team
September 24, 2022
in Business, Crypto, Media, Social
Reading Time: 4 mins read
A A
Bitgo-Digital-Galaxy-Logos
1
SHARES
11
VIEWS
Share on TwitterShare on Reddit

Palo Alto digital asset custody provider, BitGo, lost a $1.2 billion acquisition proposal. The deal was canceled by the purchaser, Galaxy Digital, in late August. BitGo has filed a lawsuit in retaliation for damages made in bad faith.

You might also like

Coinbase Argues Software Services Are Not Securities: A Case Against the SEC

Nigeria Now Enabled to Make Direct Crypto Purchases Through MetaMask

FTX Is Looking To Recover $460M From A Venture Capital Supported By Bankman-Fried’s Alameda Research

The initial agreement made headlines at the height of the 2021 bull run in May as the first $1 billion deal in the crypto sector. One year later, the global crypto market cap plummeted by over 50%. Several prominent crypto asset companies have failed, and Galaxy Digital reported a more than $550 million loss in the second quarter of 2022. 

Such drastic changes in market conditions likely led Galaxy Digital to seek a way out of their agreement and further enhanced BitGo’s desire to seek financial compensation for damages. 

Galaxy Digital’s Statement

One year after saying yes, Galaxy Digital announced the termination of the BitGo acquisition. In their public statement, Galaxy Digital alleged that BitGo could not deliver its audited financial statements on time. Thus violating the parameters of the agreement and establishing grounds to cancel the deal.  

BitGo’s Response

BitGo has retained the services of the California-based law firm Quinn Emanuel and publicly announced a desire to seek a minimum of $100 million in damages. This law firm broke headlines last year as the first group of trial lawyers to file pricing complaints against Amazon. 

BitGo’s response rests on a bad faith claim for damages incurred by Galaxy Digital. Citing a portion of the merger agreement from March 2022, Galaxy Digital promised to pay a $100 million reverse break fee to extend the merger agreement.

According to R. Brian Timmons, a partner at Quinn Emanuel, Galaxy Digital’s claim is ludicrous. “BitGo has up to this point complied with its commitments, which includes delivering its audited financials. The fact that Galaxy posted a $550 million loss for the most recent quarter, that its stock is underperforming, and that both Galaxy and Mr. Novogratz have been preoccupied with the Luna debacle are all known to the public. Either Galaxy has acted in bad faith and is subject to damages of at least that amount, or it owes BitGo the promised $100 million termination fee.

The Acquisition

As of the end of last year, BitGo had more than $64 billion in assets under custody, per the company’s blog. They counted Galaxy Digital, Goldman Sachs, Valor Equity Partners, Craft Ventures, DRW, and Redpoint Ventures among their investors. 

The proposed acquisition was not just a big deal. It was the largest deal ever reported in the industry. As declared by the SEC, Galaxy Digital planned to issue 33.8 million additional shares to BitGo shareholders and $265 million in cash to the company. At the time, Mike Novogratz, CEO, and creator of Galaxy Digital, remarked, “We are thrilled to welcome Mike Belshe and the amazing BitGo team to Galaxy Digital.

The goal for Galaxy Digital was to increase the scope of its institutional investor services, expand the firm’s geographic reach, and receive “immediate revenue synergy,” according to the SEC archive data. 

Conclusion

Given current market conditions and the reported financial losses, it is no wonder Galaxy Digital sought probable cause to terminate the $1 billion acquisition. Doing so may or may not have been in the company’s best interest. If Galaxy Digital did agree to pay $100 million in a break of contract clause, then BitGo has grounds for the case pending review of their audit compliance. Ultimately, it will be determined through arbitration or a judge to what extent BitGo may claim damages. 

Tags: BlockchaincryptoWeb3
TweetShareShare

Recommended For You

Coinbase Argues Software Services Are Not Securities: A Case Against the SEC

by BlockNews Team
March 24, 2023
0
coinbase

Coinbase CLO Paul Grewal announced that the company provided details to the SEC about why staking services are not securities Grewal saw the SEC’s perspective on software services...

Read more

Nigeria Now Enabled to Make Direct Crypto Purchases Through MetaMask

by BlockNews Team
March 24, 2023
0
metamask

Nigerians can now buy crypto using MetaMask instead of centralized exchanges Crypto fintech MoonPay merged with ConsenSys to allow users to buy cryptocurrencies through direct bank transfers Nigeria...

Read more

FTX Is Looking To Recover $460M From A Venture Capital Supported By Bankman-Fried’s Alameda Research

by BlockNews Team
March 24, 2023
0
ftx

FTX files for return of $460 million investment funds made to venture capital firm by Sam Bankman-Fried through Alameda Research. When he invested, Sam Bankman-Fried was allegedly in...

Read more

OpenZeppelin Reveals Top 10 Blockchain Hacking Techniques in 2022

by BlockNews Team
March 23, 2023
0
OpenZeppelin

OpenZeppelin's top 10 hacking methods of 2022 serve as a sobering reminder of the value of cybersecurity and the need for ongoing research to make blockchain systems more...

Read more

Links DAO To Buy Scottish Golf Course For $1M

by BlockNews Team
March 23, 2023
0
Links DAO

Links DAO has won the bid to  buy a Scottish golf course for close to $1 million. This follows a landslide community vote in favor of the purchase...

Read more
Next Post
Blockchain

Blockchain Security: The Basics 

Related News

LUNA-Logo

LUNA Foundation Guard Of The Collapsed Terra Ecosystem, Spent $2.8 Billion Trying To Defend The Peg Of TerraUSD $UST

November 18, 2022
UAE-Flag

UAE’s Ministry of Economics Opens Its Third Headquarters and Office in the Metaverse

September 30, 2022
Bitcoin

Macroeconomist Claims Bitcoin Could Offer “Economic Boost” to the United States, Here’s How

October 2, 2022

Browse by Category

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized
BlockNews.com

BlockNews.com brings you the most important Crypto and NFT news in the space.

CATEGORIES

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized

RECENT POSTS

  • Coinbase Argues Software Services Are Not Securities: A Case Against the SEC March 24, 2023
  • Nigeria Now Enabled to Make Direct Crypto Purchases Through MetaMask March 24, 2023
  • FTX Is Looking To Recover $460M From A Venture Capital Supported By Bankman-Fried’s Alameda Research March 24, 2023

© 2022 BlockNews.com - Crypto and NFT news website by JRNY Club.

No Result
View All Result
  • Home
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides

© 2022 BlockNews.com - Crypto and NFT news website by JRNY Club.

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?