Mike Novogratz, the founder and chief executive, of Galaxy Digital Holdings, announced that the company had chosen to terminate its acquisition of Bitgo, which it had announced previously.
Galaxy stated that they had decided to terminate the agreement because Bitgo had not been able to produce audited financial statements for the previous year.
Galaxy Digital Holdings explained on Monday that the proposed acquisition deal of Bitgo worth $1.2 billion cash and stock had been terminated.
As per the deal, the crypto firm would have been able to acquire the financial services provider and digital asset custody business Bitgo.
The announcement from Galaxy said that they had decided to abandon the deal because Bitgo had not been able to deliver specific financial documents.
The crypto company said that Bitgo had been told to deliver its audited financial statements for the previous year by July 31st, 2022.
It said that this had been agreed upon in the deal, but since Bitgo had failed to do so, Galaxy had decided to use their right to terminate the agreement.
It also added that they were not liable to pay any termination fee.
Galaxy to list on Nasdaq
The CEO of Galaxy made the announcement on Monday and also added that their company was positioned for success.
Novogratz said that the company was ready to benefit from strategic opportunities in order to grow sustainably.
He added that they were committed to listing in the United States and offer a prime solution to their clients, which would truly make it a one-stop shop for all institutions.
Furthermore, the company disclosed that they had every intention of listing their shares on the Nasdaq, after the completion of a review by the Securities and Exchange Commission (SEC).
The CEO asserted that they would become a Delaware-based firm, as previously announced, and would complete the proposed domestication and reorganization.
Once the SEC completes its review, they would list on the Nasdaq, as long as they are able to get approval from the stock exchange.
Based in Palo Alto, Calfornia, Bitgo stated that Galaxy was responsible for the improper decision they had made about terminating the agreement.
The company said that they would take legal action and had already availed the services of Quinn Emanuel, a law firm based in Los Angeles.
This is recognized as one of the leading global litigation firms that has about 23 offices spread across a number of countries.
A partner of the firm, R. Brian Timmons talked about the issues between the two firms after Galaxy’s press release.
Timmons said that it was absurd of Galaxy and its CEO to blame Bitgo for the termination. He asserted that the latter had honored all its obligations, which included the delivery of the documents required.
He added that it was publicly known that Galaxy’s losses for the previous quarter were $550 million, the company’s stock was performing poorly and the Luna fiasco had been a major distraction.
The lawyer said that a $100 million termination fee has to be paid to Bitgo, as promised.