BitGo will seek compensation from Galaxy Digital amounting to over $100 million for breach of merger agreement.
BitGo: legal action against Galaxy Digital claiming more than $100 million
BitGo said it plans to sue Galaxy Digital for its decision to want to terminate the merger agreement early and for not paying the $100 million termination fee promised in March 2022, which would have convinced BitGo to extend the contract.
On the other hand, according to Galaxy, BitGo failed to provide audited financial statements for 2021 by 31 July 2022 as part of the acquisition agreement.
On Twitter, the crypto company defends itself against Galaxy Digital’s notice of termination of the merger as follows:
BitGo provided audited financial statements for FY2018, FY2019, FY2020 and FY2021. In addition, BitGo provided quarterly reviewed financial statements for the nine-month period ending September 30, 2021 and the three-month period ended March 31, 2022.
— BitGo (@BitGo) August 16, 2022
“In light of Galaxy’s misleading statements about BitGo, we’re here to set the record straight. BitGo is regulated in multiple jurisdictions & has solid, GAAP, unqualified, on-time audits from tier-1 auditors for many years now.
BitGo provided audited financial statements for FY2018, FY2019, FY2020 and FY2021. In addition, BitGo provided quarterly reviewed financial statements for the nine-month period ending September 30, 2021 and the three-month period ended March 31, 2022″.
BitGo has reportedly already hired the firm Quinn Emanuel to take appropriate legal action against Galaxy Digital, which is ready to seek compensation of more than $100 million.
BitGo and the lawsuit against Galaxy Digital, its buyer since 2021
It was May 2021, when Galaxy Digital claimed to have acquired the BitGo crypto company, investing as much as $1.2 billion. This was the first acquisition in the crypto industry larger than $1 billion.
The CEO of Galaxy Digital, Mike Novogratz, had stated that this acquisition would make the holding company a major player in attracting institutional investors to the crypto sector, as BitGo is a crypto company providing custody, trading, asset management, investment banking, prime lending, and tax services.
However, the withdrawal from the merger agreement, which would have expired on 31 December 2022, appears to be Galaxy’s decision to exit.
In this regard, R. Brian Timmons, partner at Quinn Emanuel (law firm that will follow BitGo), said:
“The attempt by Mike Novogratz and Galaxy Digital to blame the termination on BitGo is absurd. 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”.
Mike Novogratz’s Bitcoin price predictions
Celebrated billionaire founder of Galaxy Digital Holding Ltd, Mike Novogratz, reportedly said recently that he expects the price of Bitcoin to remain in the $20,000 to $30,000 range for a while longer.
He did so in a Bloomberg TV interview, explaining that given the absence of significant flows of institutional capital into the crypto sector, offset by continued interest in the crypto queen, BTC is not expected to exceed $30,000, but rather remain at $20k-$30k.
And in fact, over the past month, BTC has remained in the range stated by Novogratz, without exceeding $25,000 for the time being.
