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Crypto Custody Firm BitGo Files $100M Lawsuit Against Galaxy Digital for Breaching Merger Agreement
.Galaxy had planned to acquire BitGo for $1.2 billion.
Updated May 11, 2023, 6:55 p.m. Published Sep 13, 2022, 12:08 p.m.
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Cryptocurrency custody firm BitGo has filed a lawsuit against crypto financial services firm Galaxy Digital, seeking more than $100 million in damages as it alleges that Galaxy Digital intentionally breached the firms' $1.2 billion merger agreement, which was announced in May last year.
The complaint was filed in Delaware Chancery Court and will be made available to public on Thursday. On Aug. 15, California-based BitGo declared its intention to sue Galaxy, which had planned to acquire BitGo, labelling the termination of the deal as "absurd."
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A spokesperson for Galaxy Digital told CoinDesk at the time that BitGo's claims were without merit. Galaxy Digital didn't respond to a request for comment.
The deal came to a halt in March as Galaxy waited for a U.S. Securities and Exchange Commission decision on its plans to reorganize as a Delaware-based company. Galaxy's shares trade on the Toronto Stock Exchange, and the firm still intends to list its shares on Nasdaq.
Last month, Galaxy's reported a second-quarter net loss of $554.7 million following a plunge in the value of cryptocurrencies.
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The firm, which holds mortgage provider licenses in ten U.S. states with more to follow, has a perfect track record of zero margin calls across its mortgage portfolio.
What to know:
- Milo allows crypto holders to pledge their bitcoin or ether as collateral for loan amounts up to $25 million without having to sell their digital assets.
- Milo asks for 100% of the value of the property in crypto collateral, which can be held with qualified custodians like Coinbase or BitGo, or there is a self-custodial option.
- The loans, which start at 8.25%, can also be used for things like acquiring land, funding home improvements, and business investments.
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