BitGo has teamed up with litigation powerhouse Quinn Emanuel to take Galaxy Digital to court

After BitGo failed to provide its audited financial statements for the year 2021, Galaxy Digital announced on Monday that it has canceled the $1.2 billion proposed acquisition of the crypto custodian.

BitGo Plans To Sue Galaxy After Firm Ends Merger Agreement

As per the release, the failure of BitGo to deliver the accounts by July 31, 2022, in accordance with the acquisition agreement, gives Galaxy the right to walk away without any termination fee.

Mike Novogratz, CEO, and Founder of Galaxy stated, “Galaxy remains positioned for success and to take advantage of strategic opportunities to grow in a sustainable manner. We are committed to continuing our process to list in the U.S. and providing our clients with a prime solution that truly makes Galaxy a one-stop shop for institutions,”

The deal was originally announced in May 2021 in a bid to expand Galaxy’s reach as a crypto-focused financial services platform. It revealed that it will finance the acquisition by paying $265 million in cash and will issue 33.8 million shares. After which, 10% of the company will be owned by BitGo shareholders.

However, by the end of March, Galaxy announced a delay in the acquisition as the companies renegotiated the deal for the BitGo shareholders to own approximately 12% of the company.

Meanwhile, despite pulling back from the deal, Galaxy aims to carry out the proposed reorganization and domestication to become a Delaware-based business and then list on the Nasdaq, the release highlighted. This will be upon completion of the SEC’s assessment and subject to stock exchange approval of such listing.

In addition, the statement noted, “Galaxy remains focused on executing its business objectives and driving long-term performance for investors. That includes the planned rollout of Galaxy One Prime, a new product offering for institutional investors that will integrate trading, lending, and derivatives alongside access to qualified custody all through a unified tech platform.”

The news also follows Galaxy’s second-quarter results that recorded a net comprehensive loss of $554.7 million against digital asset price declines. That said, as of June 30, 2022, the company still had a solid $1.5 billion liquidity position as per the earnings call.

That said, Novogratz believes that the company is still well-positioned to withstand extended volatility and seize tactical openings to expand Galaxy sustainably.  Meanwhile, earlier this month, BitGo also made major changes to its executive team by announcing the promotion of Chen Fang to Chief Operating Officer and the appointment of Victor Tsou to Vice President of Engineering.

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