BitGo’s purchase with Galaxy Digital for 1.2 billion is cancelled

The first 1 billion transaction in the cryptocurrency industry is falling apart as the market gives up most of its gains from its recent top.

On Monday, Galaxy Digital announced that it had cancelled its 1.2 billion deal to acquire cryptocurrency custodian BitGo, a deal that had been announced the previous year but had fallen through because the San Francisco-based startup had not yet provided audited financial statements for the year 2021.

Galaxy Digital claimed in a public statement that BitGo’s purported refusal to produce the financial data breached the agreement the two businesses had agreed upon last year and that terminating the partnership would not cost the company any money. In response to the announcement, shares of Galaxy Digital (which is listed on the Toronto Stock Exchange) rose sharply.

One of the goals of the purchase was to be the first transaction in the cryptocurrency industry to top 1 billion. By acquiring BitGo, Galaxy Digital hopes to expand its services for institutional investors. These might include investment banking, prime lending, and tax services. Several prestigious companies and investors have put their faith in BitGo, including Galaxy Digital, Goldman Sachs, Valor Equity Partners, Craft Ventures, DRW, and Redpoint Ventures.

“The strength of our combined technology, solutions, and people will unleash distinctive value for our customers and propel our businesses’ sustained expansion via this purchase. Galaxy Digital CEO and co-founder Mike Novogratz said, “We are delighted to welcome Mike Belshe and the amazing BitGo team to Galaxy Digital.”

On Monday, Novogratz (shown above) remarked, “Galaxy is positioned for success and to take advantage of strategic possibilities to develop in a sustainable way. We are dedicated to completing the U.S. listing process and offering our customers a premier service that makes Galaxy a one-stop shop for financial institutions.

Just earlier this month, Galaxy Digital reported a loss of 554.7 million for the second quarter, up from a loss of 183 million in the same period a year ago, prompting the company to make the statement. Novogratz said on an earnings call that Galaxy Digital has around 1 billion in cash.

Galaxy Digital has said that it is awaiting Nasdaq listing permission and SEC scrutiny.