The Delaware Supreme Court has ruled in favor of BitGo by overturning a lower court’s dismissal of the company’s $100 million lawsuit against Galaxy Digital. The lawsuit arose from a failed acquisition between the two entities, with the Delaware Supreme Court stating on May 22 that the language used in the BitGo-Galaxy Digital $1.2 billion merger agreement was “ambiguous.” This ambiguity led to the decision being reversed and the opportunity for additional evidence to be considered in order to resolve the ambiguity. This successful appeal gives BitGo another chance to pursue legal action against Galaxy Digital, with the initial lawsuit accusing Galaxy of an “intentional breach” of the acquisition agreement.
J. Travis Laster, Vice Chancellor of the Delaware Court of Chancery, had previously dismissed BitGo’s case with prejudice in June 2023, determining that Galaxy had a “clean termination right” regarding the BitGo acquisition. In response to the recent decision by the Delaware Supreme Court, a spokesperson for Galaxy stated that the company would “continue to vigorously defend ourselves” and expressed confidence in the merits of their case. Despite this legal battle, Galaxy Digital continues to expand its operations, with Galaxy Asset Management being appointed by the FTX estate in 2023 to assist with the selling, staking, and hedging of its crypto holdings. The division is headed by Steve Kurz, who leads the Global Head of GAM within Galaxy Digital Holdings.
Following the announcement of the acquisition of BitGo in May 2021 by Galaxy, the deal was terminated in November 2022, with Galaxy citing BitGo’s failure to provide audited financial statements from 2021 as the reason for the termination. This decision came as the cryptocurrency exchange FTX faced collapse, with Galaxy disclosing approximately $77 million in exposure to FTX just before the exchange filed for bankruptcy. Despite facing legal challenges and financial setbacks, Galaxy Digital’s stock has seen a 23.5% gain since the beginning of the year, albeit still nearly 70% lower than its all-time high of $40 during the previous crypto market peak in November 2021.
Galaxy Asset Management’s global head, Steve Kurz, has expressed optimism about the future of spot Bitcoin ETFs, predicting that top wirehouses will increase their involvement in these ETFs within the next year. Kurz expects to see institutional FOMO as companies offering spot Bitcoin ETFs have been receiving queries from financial advisers, indicating a growing interest in this investment option. Despite the legal battles and financial challenges faced by Galaxy Digital, the company remains committed to its expansion and growth, with Galaxy Asset Management playing a key role in the management and handling of crypto assets for various clients. As the cryptocurrency market continues to evolve, companies like Galaxy Digital are adapting and positioning themselves for success in this rapidly changing industry.
