Galaxy Digital and BitGo Face Off in Court Over $100 Million Merger Dispute
A major legal battle in the crypto industry has finally reached the courtroom. Billionaire Michael Novogratz’s Galaxy Digital and crypto custody firm BitGo faced off in court this week, according to a Bloomberg report.
The high-stakes dispute traces back to a failed $1.2 billion merger agreement. BitGo is now demanding at least $100 million in damages or reverse break fees from Galaxy Digital for walking away from the deal.
The acquisition was originally announced in May 2021. As part of the initial agreement, BitGo co-founder and CEO Mike Belshe was set to join Galaxy as deputy CEO and board member. However, Galaxy Digital officially terminated the transaction in August 2022.
BitGo Claims Galaxy Hid U.S. Regulatory Probes
In court, BitGo argued that Galaxy Digital did not act in good faith to finalize the acquisition. The custody firm claims Galaxy failed to use reasonable efforts to close the deal.
Furthermore, BitGo alleges that Galaxy hid crucial details regarding active investigations by U.S. authorities. BitGo argues that these regulatory probes would have severely impacted Galaxy’s ability to complete the massive merger.
Galaxy's Defense: Missing Financial Statements
Galaxy Digital has maintained a different stance since pulling out of the deal in 2022. The firm insists it had a valid, contractual reason to terminate the agreement without penalties.
Galaxy claims the termination was triggered by BitGo’s internal delays. Specifically, Galaxy stated that BitGo failed to deliver audited financial statements for 2021 by the July 31, 2022 deadline. Because these documents did not comply with the merger terms, Galaxy asserts that no termination fee is owed.
The Long-Standing Legal Battle for Damages
The legal battle has been brewing for nearly four years. Since the deal collapsed in 2022, BitGo has publicly vowed to hold Galaxy accountable.
Key Takeaway: BitGo is seeking a $100 million reverse break fee at minimum. However, the company has indicated it may push for an even higher amount to cover total legal damages resulting from the failed $1.2 billion deal.
