BitGo Sues Galaxy Digital Over $100M Termination Fee

BitGo filed a lawsuit against Galaxy Digital this week, asking a court to order at least $100 million after Galaxy ended a planned $1.2 billion acquisition in August 2022.

In court filings, BitGo alleges Galaxy failed to use reasonable efforts to complete the deal and concealed details of U.S. government probes that would have affected closing. BitGo wrote that Galaxy “failed to use reasonable efforts to get the deal done and hid from it details of probes by U.S. authorities that likely would have impacted their ability to complete the merger.”

Galaxy terminated the agreement in August 2022, citing BitGo's missed July 31, 2022 deadline to provide audited financial statements for 2021. Galaxy's filings pointed to BitGo's “failure to deliver, by July 31, 2022, audited financial statements for 2021 that comply with the requirements of our agreement” and maintained it was not required to pay a termination fee.

The transaction was first announced in May 2021 and was valued at about $1.2 billion at the time. Under the proposed deal, BitGo co-founder and CEO Mike Belshe would have become Galaxy's deputy CEO and joined its board.

BitGo asks the court either to enforce a termination payment of at least $100 million or to award greater damages. Court documents outline differing views on the contract's requirements, the timing and adequacy of financial disclosures, and each party's obligations to cooperate toward closing.

The case was heard this week and remains in litigation. Filings identify Michael Novogratz as Galaxy's founder and chief executive. No final ruling has been issued.