Galaxy Digital founder Mike Novogratz and Bitgo CEO Mike Belshe testified this week in Delaware Chancery Court in a dispute over a failed $1.2 billion merger that collapsed in 2022. Bitgo is seeking at least $100 million in damages related to the termination.
Delaware Court Hears Testimony From Novogratz and Belshe
The proceedings center on whether Galaxy Digital lawfully terminated its agreement to acquire Bitgo, a digital asset custodian, and whether Bitgo is entitled to damages. Testimony from the companies’ chief executives is expected to inform the court’s view of the negotiations, deal obligations, and the events leading up to the collapse.
Background: $1.2 Billion Deal Announced in 2021, Terminated in 2022
Galaxy Digital agreed in May 2021 to acquire Bitgo in a transaction valued at approximately $1.2 billion in cash and stock. In August 2022, Galaxy announced it was terminating the deal, citing Bitgo’s alleged failure to deliver certain audited financial statements by a contractual deadline. Bitgo disputed that characterization and quickly filed suit, alleging wrongful termination and seeking at least $100 million in damages.
The merger would have combined Galaxy’s trading, asset management, and investment banking operations with Bitgo’s institutional custody and wallet infrastructure. The deal’s collapse came amid broader crypto market turbulence in 2022, which weighed on valuations and deal activity across the sector.
Key Issues Before the Court
- Whether Galaxy Digital had a valid contractual basis to terminate the merger agreement.
- Whether Bitgo satisfied, or was excused from, its delivery obligations for audited financials.
- The scope of any damages or termination fees that may be owed.
A ruling has not yet been issued. Further filings and the court’s decision will determine potential damages and set guidance for how Delaware courts may interpret termination provisions in large crypto-related mergers.
Why It Matters
The outcome could influence how acquirers and targets structure closing conditions, audit requirements, and reverse termination fees in future digital asset deals. It also underscores the legal and operational complexities of large-scale consolidation in the crypto industry.