Galaxy Digital terminates $1.2 billion BitGo acquisition deal
What was supposed to be a landmark deal for the crypto industry has fallen apart in acrimony as Galaxy Digital Holdings said it would abandon its $1.2 billion bid for BitGo, claiming the digital-asset custodian failed to deliver financial statements that the target company insists it has supplied.
Galaxy, an investment firm, is trying to walk away from a $100 million breakup fee. The company announced Monday that it was exercising “its contractual right to terminate” the cash-and-stock transaction.
That doesn’t sit well with BitGo, which provides custody services for institutions. “BitGo has absolutely delivered on the audits that were needed to get this deal done,” says Brian Timmons, a partner with Quinn Emanuel law firm, which represents the custodian. “Galaxy is the one with the problem and it’s saying: It’s not me, it’s you,” he adds.
When Forbes asked Galaxy spokesman Michael Wursthorn about BitGo’s claim, he said “I can’t speak to BitGo’s statements.”
The acquisition was agreed in May 2021, with San-Francisco-based BitGo set to help Galaxy Digital expand its offerings for institutional investors. The transaction, the first $1 billion deal in the crypto industry, had an anticipated close in Q4 last year. After the acquisition was stalled for months as Galaxy Digital sought approval from the U.S. Securities and Exchange Commission, which the company still does not have, BitGo declined to extend the deal without a termination fee.
“BitGo agreed to extend this deal back in March only because Galaxy agreed to a breakup fee,” Timmons said. “Without it, BitGo would never have agreed to the extension. It had other interested suitors.”
Galaxy’s Wursthorn insists his company was within its rights to end the deal and maintains “we’re not paying a termination fee.” When asked why the audited financial statements were a deal breaker for the acquisition, Wursthorn declined to answer.
Timmons says the fault lies with Galaxy. “BitGo’s business remains as strong as ever. Galaxy is the one who has encountered regulatory headwinds,” he states. “Its currency has taken a tumble. It has been beset by the Luna controversy. Anyone who reads the news knows that Galaxy is making up excuses to walk away from this marriage and avoid paying the breakup fee.”
Galaxy Digital recently reported a second-quarter loss of $554.7 million. But CEO Michael Novogratz said the company still had $1 billion in cash in the company’s earnings call on August 8.
Editor’s Note: The quote from Michael Wursthorn regarding BitGo’s statement was updated for clarity.

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