The financial services provider and digital asset custody business, Bitgo recently disclosed that it had recently filed a lawsuit against Galaxy Digital.
The company said that it had decided to sue the crypto company for damages of over $100 million. It said that the lawsuit was due to Galaxy’s intentional breach and repudiation of their merger agreement.
Termination of acquisition deal
On August 16th, reports indicated that Galaxy Digital’s Mike Novogratz had decided to not go through with their acquisition deal of Bitgo.
Originally, the billionaire investor’s company had intended to buy the crypto asset financial services provider in May 2021 for a $1.2 billion deal involving stocks and cash.
But, Galaxy had stated that they had decided to terminate the deal because specific financial documents had not been delivered by Bitgo.
It specified that these documents were the audited financial statements of the company for the previous year.
According to Galaxy, these documents had not been delivered by Bitgo on the date specified. Bitgo had immediately reacted to the allegations after the deal’s termination was announced by Galaxy Digital.
The company had published a press release saying that Galaxy Digital was legally liable for its decision to end the acquisition deal, which was improper.
It made the announcement of the lawsuit on September 13th in which it said that its goal is to address the decision of Galaxy Digital to breach their agreement intentionally and end the deal.
The company has reached out to Quinn Emanuel, a litigation firm based in Los Angeles.
Brian Timmons, a partner at the litigation firm, said that they had filed the lawsuit under seal in Delaware Chancery Court because they were just being cautious.
There was no confidential information that had been included in the complaint.
However, Bitgo said that Galaxy does not believe so and it has asked that some of the allegations be removed from the complaint before it goes public.
But, it did add that even if they decide to redact some of the information, the public would still be able to access the information on Thursday, shortly after 5 pm.
As far as the lawsuit issue is concerned, Bitgo believes that Galaxy Digital owes it $100 million in termination fees and other damages and the story is being closely followed by the crypto community.
Users said that they were interested in knowing the exact allegations that Bitgo had made against Galaxy Digital.
When Galaxy announced the decision to terminate the deal, it had said that since it was Bitgo’s failure to provide documents that resulted in termination, they did not have to pay anything.
It claimed that no termination fee was applicable, but Bitgo does not believe so and it has decided to pursue the matter legally against Mike Novogratz’s company.
It would certainly be interesting to see how events unfold in the matter, as the complaint is likely to move forward unless the two companies reach a settlement.