BitGo Files $100M Lawsuit Against Galaxy Digital
- The crypto custodian is seeking more than $100 million in damages from Galaxy Digital for the “intentional breach” of its $1.2 billion acquisition deal.
- BitGo noted the complaint was filed under seal as to give Galaxy Digital the opportunity to redact “some of the allegations before the complaint becomes public”.
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Cryptocurrency custodian BitGo has filed a lawsuit against crypto investment firm Galaxy Digital for the breach of its merger agreement, the company said via Twitter on 13 September.
According to the announcement, BitGo is seeking more than $100 million in damages from Galaxy Digital, noting that the investment firm had intentionally breached its $1.2 billion acquisition deal with the crypto custodian. The lawsuit was filed with the Delaware Chancery Court under seal — though it should be accessible to the public on Thursday — to give Galaxy Digital the opportunity to redact “some of the allegations before the complaint becomes public”.
The $1.2 billion acquisition deal was terminated by Galaxy Digital on 15 August, with the investment firm claiming BitGo had failed to deliver audited financial statements for 2021, which it should have done by the end of July 2021. At the time, Galaxy Digital noted it will not be paying any termination fees as the decision was made in line with the acquisition agreement.
Only hours after the acquisition deal was terminated BitGo published its own press release, noting that it had honored its obligations and that it hired “litigation powerhouse” Quinn Emanuel to take the appropriate legal actions. R. Brian Timmons, a partner with Quinn Emanuel, said in a statement at the time:
“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.”
- One of the largest South Korean commercial banks, KEB Hana Bank, partnered with crypto custodian BitGo in order to set up a new crypto custody venture in the country.
- The new venture, which will use BitGo’s crypto security expertise and Hana’s experience in financial services and compliance, is expected to launch in the second half of 2024.
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- During an interview with FT, CEO Brian Armstrong said that before the lawsuit a SEC staff member had said that all crypto except BTC was security, and should be delisted.
- When asked how he came to that conclusion, the SEC staff member reportedly said “we’re not going to explain it to you, you need to delist every asset other that Bitcoin”.
- The bankrupt crypto lender has agreed on a settlement with its Series B holders on how to distribute the $25 million from the sale of self-custody platform GK8.
- The majority of funds, $24 million, will be allocated for legal expenses, while the remaining $1 million will be distributed between the Series B holders.