The global crypto industry’s first $1 billion deal has not seen the light of day. Digital asset and blockchain leader Galaxy Digital announced on 15 August that it terminated the $1.2 billion acquisition of digital asset trust company BitGo. Mike Novogratz’s crypto investment firm decided to drop the acquisition because it failed to provide audited financial statements for 2021.
Galaxy terminated the deal after BitGo failed to deliver audited financial statements for 2021 by 31 July 2022, as stipulated by the agreement. Galaxy stated that there is no fee to be paid in relation to the termination.
However, BitGo has disputed Galaxy Digital’s claim. BitGo argues that the deal was not set to expire until 31 December “at the earliest,” and that Galaxy Digital has failed to pay the $100 million reverse break fee it “promised back in March 2022 in order to induce BitGo to extend the merger agreement.”
Galaxy initially announced plans to acquire BitGo in May 2021 as part of its US IPO plans. Despite multiple delays, Galaxy was expected to complete the acquisition by the end of 2022.
What does this mean for its US listings plan?
The BitGo acquisition was intended to assist Galaxy Digital in expanding its offerings to institutional investors by adding services such as investment banking, prime lending, and tax services.
Despite the deal falling apart, Galaxy is continuing to pursue its plans to list in the United States. It is doing this by reorganizing its operations to become a Delaware-based company. Galaxy also will be introducing new products such as Galaxy One Prime—a product aimed at institutional investors.