Cryptocurrency custody company BitGo said Monday it plans to sue Galaxy Digital for backing out of the firms' $1.2 billion merger agreement.
BitGo, which is one of the biggest custodians in the crypto industry, said it will seek $100 million in damages from Galaxy. In a press release, it said Galaxy is refusing to pay this previously promised breakup fee.
“The attempt by Mike Novogratz and Galaxy Digital to blame the termination on BitGo is absurd,” said R. Brian Timmons, a partner with Quinn Emanuel, the law firm BitGo has retained. Novogratz is Galaxy's CEO.
In the press release, Timmons pointed to Galaxy's recent losses, which he said range in the hundreds of millions of dollars.
"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,” Timmons said.
A spokesperson for Galaxy told CoinDesk that the company believes "BitGo's claims are without merit and we will defend ourselves vigorously. As previously stated, BitGo did not provide certain BitGo financial statements needed by Galaxy for its SEC filing. Galaxy's Board of Directors then made the decision to exercise its contractual right to terminate."
UPDATE (August 15, 19:41 UTC): Added response from Galaxy.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.