The digital asset custodian stated in a court document made public on Thursday that Galaxy Digital Holdings Ltd, a cryptocurrency financial services company, should pay at least $100 million in damages for backing out of its $1.2 billion purchase agreement for BitGo Inc.
According to the complaint by BitGo that was filed on Tuesday under seal, Galaxy terminated the takeover, the first billion-dollar crypto deal, because it was suffering from the demise of digital currencies but did so unfairly by blaming BitGo’s accounting.
BitGo’s case, submitted in Delaware’s Court of Chancery, stated that “Galaxy’s decision to terminate the merger with BitGo prematurely had nothing to do with BitGo’s financial statements and everything to do with Galaxy’s huge losses.”
At least $100 million in damages are sought in the claim for Galaxy’s alleged breach of the takeover deal.
The case would be thrown out, according to Galaxy.
In a response, Galaxy stated, “We categorically refute the complaints’ assertions.”
Due to BitGo’s failure to meet a deadline of July 31 to produce audited 2021 financial statements, Galaxy announced in August that it was ending the takeover.
In May 2021, when the price of bitcoin reached more than $55,000 due to a craze over digital assets, Galaxy announced the acquisition.
The largest cryptocurrency deal at the time extended Galaxy into digital custodial services as it was getting ready to float its shares on Nasdaq through cash and stock purchase.
However, investors have lost interest in digital assets since late 2021, and on Thursday, bitcoin’s price was slightly under $20,000. Galaxy said it lost $554 million in the second quarter of this year but added that it still planned to list on Nasdaq and had more than $1 billion in cash.
Michael Novogratz, a former hedge fund manager and pioneer of the cryptocurrency industry, started Galaxy in 2018 as an investment management company that later branched out into investment banking and trading.