Galaxy Digital, a crypto-focused fintech firm, has pulled itself out of acquiring BitGo, a San Francisco-based crypto startup. The Now Off deal, announced last year, was the first multi-billion dollar deal to come out industrially in the crypto space. According to Galaxy Digital, BitGo’s failure to provide financial statements by a pre-set deadline of July 31 led to a breach of contract that ultimately led to the collapse of the high-end deal.
In response to Galaxy Digital’s decision to pull out of the deal, BitGo has decided to levy $100 million (roughly Rs. 795 crore) in damages.
“Intends to hold Galaxy Digital legally responsible for its improper decision to terminate its merger agreement with BitGo, which will not expire until December 31, 2022 at the earliest, and for non-payment of $100 million in reverse (about Rs. 795 crore) to induce BitGo to extend the merger agreement. Promised to return in March 2022, ”A Blog BitGo said on August 15.
The San Francisco-based company has hired California-based law firm Quinn Emanuel to take appropriate legal action against the termination of Galaxy Digital’s contract.
BitGo, which counts Galaxy Digital, Goldman Sachs and Valor Equity Partners among others as backers, held digital assets worth $64 billion (roughly Rs. 5,07,700 crore) by the end of 2021.
For Galaxy Digital, it is claimed that no termination fee is payable in connection with the cancellation of this Agreement.
“Galaxy Digital Holdings announced today that it has exercised its right to terminate its previously announced acquisition agreement with BitGo, due to BitGo’s failure to deliver audited financial statements for 2021 by July 31, 2022 that comply with our contractual requirements. No termination fee is payable,” a statement Read from the company.
Meanwhile, Galaxy Digital, in early August, reported a loss of $554.7 million (roughly Rs. 4,400 crore) in the second quarter, higher than a loss of $183 million (roughly Rs. 1,500 crore) a year ago.
It is only a matter of time before the next phase of this debacle unfolds, the details of which are still unclear.