Mike Novogratz’s Galaxy Digital Facing Lawsuit from BitGo

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Alex Dovb­nya

Bit­Go has teamed up with lit­i­ga­tion pow­er­house Quinn Emanuel in order to take Galaxy Dig­i­tal to court 

Insti­tu­tion­al cryp­to cus­tody firm Bit­Go has announced its inten­tion to sue Mike Novogratz’s Galaxy Dig­i­tal, seek­ing about $100 mil­lion worth of damages.

Ear­li­er today, Galaxy Dig­i­tal called off its $1.2 bil­lion pro­posed acqui­si­tion of the firm.

The Novo­gratz-helmed firm claims that the lack of finan­cial state­ments was the rea­son behind its deci­sion to ter­mi­nate the deal.

As report­ed by U.Today, Galaxy Dig­i­tal agreed to acquire Bit­Go for the record-break­ing $1.2 bil­lion in stock and cash.
R. Bri­an Tim­mons, BitGo’s legal rep­re­sen­ta­tive, insists that the com­pa­ny actu­al­ly hon­ored its oblig­a­tions, describ­ing the accu­sa­tions as “absurd.”

The part­ner with Los Ange­les, Cal­i­for­nia-based law firm Quinn Emanuel attrib­ut­es the deci­sion to ter­mi­nate the acqui­si­tion deal, which was orig­i­nal­ly sup­posed to close in the fourth quar­ter of 2021, to the poor per­for­mance of the Galaxy stock. The com­pa­ny recent­ly report­ed a sec­ond-quar­ter loss of a whop­ping $554.7 million.

Bit­Go also believes that the col­lapse of the Ter­ra blockchain project was a major dis­trac­tion for Novo­gratz, forc­ing Galaxy Dig­i­tal to ax the deal.  In Jan­u­ary, Novo­gratz proud­ly dis­played his Luna-inspired tat­too before the major cryp­tocur­ren­cy col­lapsed sev­er­al months later. 

Bit­Pay claims that Galaxy Dig­i­tal could be forced to pay more dam­ages if it los­es the loom­ing lawsuit. 

Pri­or to Galaxy Dig­i­tal, pay­ment giant Pay­Pal was report­ed in talks to buy the lead­ing cryp­to cus­tody firm for $700 mil­lion, but the deal fell through.

Bit­Go, which was found­ed all the way back in 2011, now boasts more than $64 bil­lion in assets under management.

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