US court dismisses BitGo’s claims in $100M lawsuit against Galaxy Digital

Vice Chancellor J. Travis Laster of the Delaware Court of Chancery said Galaxy had a “clean termination right” to the acquisition of BitGo, which it announced in 2022.

The Delaware Court of Chancery in the United States has granted a motion from crypto investment firm Galaxy Digital largely dismissing digital asset custodian BitGo’s case following a dropped acquisition of the firm in 2022.

According to court documents filed on June 9, Vice Chancellor J. Travis Laster dismissed BitGo’s complaint against Galaxy Digital with prejudice. The decision followed Galaxy dropping its decision to acquire BitGo in August 2022 as part of a $1.2-billion deal after extensive efforts, citing a breach of contract. BitGo subsequently filed a lawsuit against Galaxy seeking $100 million in damages.

In his ruling, Laster said Galaxy had a “clean termination right” to the BitGo acquisition based in part on BitGo’s failure to deliver certain financial statements in its efforts to go public in the United States. A Galaxy spokesperson told Cointelegraph the company was “pleased” with the court’s decision to dismiss BitGo’s claims.

“There are no facts alleged that could make it reasonably conceivable that the exercise of the termination right was inconsistent with the implied covenant of good faith and fair dealing,” said Laster.

We’re pleased with the court’s decision to dismiss BitGo’s claims. Now is the time for all of us to work together and focus on the task at hand: Upgrading the global financial system in a manner that promotes innovation and protects investors and consumers alike. pic.twitter.com/xPrMP8AghW

— Galaxy (@galaxyhq) June 12, 2023

In a statement to Cointelegraph, a BitGo spokesperson said the firm planned to appeal the decision, and "continues to believe that Galaxy wrongfully terminated the agreement.” The company also recently signed a non-binding letter of intent to acquire fintech infrastructure provider Prime Trust.

Related: Galaxy Digital swings to profit after $1B net loss in 2022

Operated by Mike Novogratz, Galaxy Digital announced its intention to acquire BitGo in May 2021 as part of its public offering in the United States. However, in 2022 the BitGo deal fell apart, and the company disclosed $77 million in exposure to failed crypto exchange FTX, which declared bankruptcy in November.

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Update (June 12 at 6:37 PM in UTC): This article has been updated to include a response from BitGo.