BitGo to sue Galaxy Digital for $100 million

Digital asset custodian BitGo has announced plans to seek more than $100 million in damages from Galaxy Digital, claiming the investment firm owed funds under a "reverse break fee" in its decision to terminate an acquisition deal.

In a blog post published Monday, BitGo called Galaxy's actions in alleged breach of contract to terminate its agreement to acquire the digital asset custodian "improper." BitGo retained the services of law firm Quinn Emanuel to take legal action against Galaxy for failing to pay "the promised $100 million reverse break fee in March 2022." According to Galaxy, BitGo failed to provide audited financial statements for 2021 by July 31, 2022 as part of the purchase agreement, and Quinn Emanuel partner R. Brian Timmons denied this allegation: "Mike Novogratz and Galaxy Digital's attempt to hold BitGo responsible for the termination is absurd [...] Either Galaxy owes BitGo a termination fee of $100 million as promised, or it is acting in bad faith and faces damages of that amount or more." Galaxy had announced its intention to acquire BitGo in May 2021 as part of its plans to go public in the United States. Following a delay at the end of the first quarter of 2022, when Galaxy CEO Mike Novogratz said the firm was "tweaking the deal a bit," the acquisition was expected to take place between Q2 and Q4 of 2022. A Galaxy spokesperson told Cointelegraph, "We believe BitGo's allegations are without merit and will defend ourselves vigorously. BitGo failed to provide certain BitGo financial statements that Galaxy needed for its SEC filing. In response, Galaxy's Board of Directors decided to exercise its contractual right to terminate." It is unclear whether the recent market downturn was a factor in the deal potentially falling through. Galaxy had initially said it planned to pay about $1.2 billion in stock and cash in 2021. BitGo said on Monday that it had more than $ 64 billion in assets at the end of 2021 and that "customer growth continues through 2022."   Source: cointelegraph