Dismissal of BitGo’s $1.2B lawsuit against Galaxy Digital by Delaware Judge.

A federal judge has ruled in favor of Galaxy Digital (GLXY.TO) – the cryptocurrency merchant bank led by Mike Novogratz – in its decision to cancel its $1.2 billion acquisition of BitGo, a cryptocurrency custodian. Delaware Chancery Court Vice Chancellor James Laster stated that Galaxy had a “valid basis” to terminate the deal as BitGo provided “non-compliant” documents regarding its financial health. Judge Laster’s ruling stated that “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.” The two companies initially agreed to a deal in May 2021, with Galaxy aiming to become a one-stop-shop for prime brokerage services for institutional investors. However, due to the crypto bear market, Galaxy called off the merger in August 2022, citing BitGo’s withholding of audited financial statements. BitGo then sued for $100 million in damages, claiming Galaxy’s reasoning was “absurd” and suggesting that Galaxy withdrew because it could no longer afford the purchase after incurring hundreds of millions in losses during the bear market. Edited by Stephen Alpher.