Mike Novogratz's Galaxy Digital Facing Lawsuit from BitGo

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.