Galaxy Digital, Mike Novogratz’s crypto custody firm BitGo will not be pursued, the company announced today. Galaxy Digital, a crypto investment company run by Mike Novogratz is announcing that it will end its proposed deal with BitGo.
Galaxy reports that the firm has exercised its rights to end the previously announced acquisition agreement, “following BitGo’s failure to deliver, before July 31, 2022 audited financial accounts for 2021 that conform to the requirements of our Agreement.”
Galaxy stated that there will be no fees if the agreement is terminated.
Galaxy CEO Mike Novogratz stated that Galaxy is still well-positioned to succeed and to capitalize on strategic opportunities to grow in an sustainable manner. We are determined to continue our listing process in the U.S., and provide our clients with a prime option that truly makes Galaxy an institution-friendly one-stop shop.
In May 2017, Galaxy first announced that it would acquire BitGo in a $1.2 million deal. If the deal had been successful, it would have been one of the largest in crypto industry. It would have brought Galaxy around 400 new clients worldwide and allowed the firm to expand geographically.
One year had passed since the announcement. By May 2022 Galaxy claimed it was still working on the acquisition.
Galaxy also stated in an SEC file that it would “issue incremental stock shares of its common stock for BitGo’s shareholders in return for BitGo’s net digital assets at the close.” According to media reports, the firm implicitly confirmed that BitGo’s Ethereum and holdings were included in the purchase price. The actual value of the custodian is therefore significantly lower than the $1.2 billion previously announced.
This news comes on the heels of Galaxy’s Q2 earnings report last week which saw the company report $554,000,000 in unrealized losses to its crypto holdings.
Galaxy reported that it had $1.5 billion of liquidity at the end June, mainly in cash, despite the impact of the bear market in 2022.
Today’s announcement reiterated the firm’s plans to reorganize in Delaware.
This move, provided Galaxy receives a regulatory approval, will allow the firm to go public on Nasdaq in addition to its current listing on the Toronto Stock Exchange.
Galaxy One Prime will be a new offering for institutional investors, which will include trading, lending and derivatives services.