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BitGo’s $100 million lawsuit against Galaxy gets green light from Delaware State Supreme Court

BitGo accuses Galaxy of violating the terms of the agreement, paving the way for further legal proceedings and a potential settlement of the dispute through a lawsuit.

Date: 2024-05-27 Author: Marek Stiller
BitGo’s $100 million lawsuit against Galaxy gets green light from Delaware State Supreme Court

The Delaware Supreme Court has ruled in favor of BitGo, overturning a lower court’s decision to dismiss the company’s $100 million lawsuit against Galaxy Digital . The lawsuit stems from a failed acquisition between the two entities.

In its May 22 motion, the Delaware Supreme Court said the language used in the $1.2 billion BitGo-Galaxy Digital merger agreement was “ambiguous.” The ambiguity led the court to reverse the decision made by the Delaware Court of Chancery and allow consideration of additional evidence to resolve the ambiguity.

BitGo may take legal action against Galaxy

A successful appeal, originally filed on February 7, now gives BitGo another chance to take legal action against Galaxy Digital. In the original lawsuit filed in August 2022. BitGo accused Galaxy of “willful breach” of the acquisition agreement.

Galaxy terminated the agreement, claiming it was entitled to do so after BitGo failed to submit audited financial statements for 2021.

“We believe that justice has prevailed on appeal, and we are pleased to move forward with this case,” said R. Brian Timmons, a partner at the Quinn Emanuel law firm representing BitGo.

Vice Chancellor J. Travis Laster determined that Galaxy then had a “clean right to terminate the agreement” in connection with the BitGo acquisition. In response to the recent Delaware Supreme Court decision, a Galaxy spokesman stated that the company would “continue todefend itself vigorously” and expressed confidence in the merits of its case.

Galaxy, headed by Mike Novogratz, announced its intention to acquire BitGo in May 2021 in a public offering in the United States. However, in November 2022, when cryptocurrency exchange FTX faced collapse, Galaxy disclosed exposure to FTX worth about $77 million just before the exchange declared bankruptcy.

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Galaxy continues to expand

FTX Estate has appointed Galaxy Asset Management to assist in the sale, staking and hedging of its cryptocurrency holdings in 2023. Galaxy Asset Management is the institutional investment arm of Galaxy Digital Holdings, which covers global markets and digital infrastructure solutions.

Despite a 4% drop in Galaxy Digital (GLXY) shares to $12.80 in after-hours trading, the stock has gained 23.5% since the beginning of the year. Most of these gains followed the approval of Bitcoin ETFs in mid-January.

However, the stock remains nearly 70% below its all-time high of $40 during the previous cryptocurrency market peak in November 2021.

Recently, the global head of Galaxy Asset Management, Steve Kurz, said he expects leading wirehouses to increase their exposure to Bitcoin ETFs over the next year.

“I would be surprised next year if the top 10 wirehouses don’t get involved… We’relikely to see institutional FOMO,” he – He told FOX Business on February 19 at the Exchange ETF Conference in Miami Beach, Florida.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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