Galaxy Digital Exits BitGo Deal With No Termination Fees

Galaxy Digital Exits BitGo Deal With No Termination Fees

Galaxy Digital Holdings terminated its $1.2 billion acquisition of BitGo after the crypto custody provider failed to deliver audited financial statements ahead of schedule.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Digital asset and blockchain firm Galaxy Digital Holdings announced on Monday it has terminated its acquisition of BitGo after the institutional digital asset platform failed to deliver the requested audited financial statement for 2021 before the due date. As such, Galaxy will not pay any fees in relation to the deal termination.

BitGo Fails to Deliver the Requested Financial Statements

Galaxy Digital terminated its acquisition deal with the crypto custodial services provider BitGo after it failed to “deliver, by July 31, 2022, audited financial statements for 2021” that were required in the agreement. Under the terms of the deal, Galaxy is not obliged to pay termination fees.

“Galaxy remains positioned for success and to take advantage of strategic opportunities to grow in a sustainable manner. We are committed to continuing our process to list in the U.S. and providing our clients with a prime solution that truly makes Galaxy a one-stop shop for institutions.”

– Mike Novogratz, CEO, and Founder of Galaxy Digital.

The move comes just months after the two companies announced the deal. The acquisition would have turned the FINRA-approved Galaxy Digital into a full-service platform offering a broad range of services and products to institutional investors.

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Key Benefits of the Now-Terminated Deal

If the deal would have gone through, the acquisition of BitGo would bring numerous fresh additions to Galaxy’s existing business lines including a regulated client custody service offered by BitGo Trust Companies. It would have also reinforced Galaxy Digital with more than 400 global new clients.

Moreover, the acquisition would have also boosted Galaxy’s innovation and development capabilities through the addition of more than 50 engineers, as well as key product and infrastructure security staff. The deal was valued at $1.2 billion at the time.

“The acquisition of BitGo establishes Galaxy Digital as a one-stop-shop for institutions and significantly accelerates our mission to institutionalize digital asset ecosystems and blockchain technology.”

Novogratz said upon the announcement of the deal.

Based in Palo Alto, California, BitGo is a digital asset trust and security company providing crypto custody, trading, prime lending, and tax management services. The company currently manages more than $40 billion in assets and collaborates with more than 150 exchanges and 400 institutional clients.

BitGo acquired securities tokenization platform Harbor in 2020, a deal that allowed the company to expand beyond custodial services and allow it to issue, trade, and transfer security tokens.

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Were you surprised by Galaxy Digital’s decision to terminate the BitGo deal? Let us know in the comments below.

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