thecoinrise.com
Crypto custodian BitGo has gone through with its plan to file a lawsuit against Galaxy Digital for the termination of its merger and acquisition deal.
Earlier, the firm reported that it requested $100 million in damages from the crypto financial service provider for suddenly and intentionally pulling out before their agreement was finalized. The merger which was initially announced in May 2021 is worth over $1.2 billion.
According to a Twitter post by BitGo,
“Late yesterday, BitGo filed a lawsuit against Galaxy Digital seeking damages of more than $100 million arising from Galaxy’s improper repudiation and intentional breach of its merger agreement with BitGo.”
Straightaway, the lawsuit has been filed with the Delaware Chancery Court and would be accessible to the public from Thursday 15th September.
Galaxy Digital Rethinks BitGo Acquisition
After the declaration of the merger in May last year, Galaxy Digital began to feel reluctant about its decision to acquire the custodian.
Then, in August Galaxy Digital finally decided to suspend its plans following several months of intensive search for a buyer by BitGo. The initial plan had been to purchase BitGo at a $1.2 billion value which was meant to be paid for by both stocks and shares.
Interestingly, the cash to be paid to BitGo will be worth $265 million and the rest will be doled out in newly issued Galaxy Digital shares.
Also, BitGo will be liable to receive a 10% share from Galaxy Digital. Additionally, the CEO and co-founder of BitGo Mike Belshe was meant to join the Galaxy Digital team as the new Deputy CEO and a member of the Board of Directors.
The decision of Galaxy Digital to pull out of the merger entails that he pays a severance fee of $100 million which is what BitGo is currently requesting. In defense, Galaxy had said that it planned to pay no severance fee to BitGo owing to the fact that the custodian failed to submit an audited financial statement from the previous years which was requested.
Similarly, San Francisco-based company Bolt Financial has decided to halt its overpriced Wyre acquisition deal worth $1.5 billion. Although, they have both decided to work together and support each other as independent businesses.