Crypto Giant Galaxy Digital Ditches Billion Dollar BitGo Buyout As Losses Tripled And Terms Weren't Met

Crypto Giant Galaxy Digital Ditches Billion Dollar BitGo Buyout As Losses Tripled And Terms Weren't Met

Galaxy Digital Holdings Ltd BRPHF shares traded lower by 2.8% on Monday after the company announced it has scrapped a major acquisition deal.

What Happened? Galaxy Digital announced it is terminating its acquisition deal for BitGo after the company failed to deliver audited financial statements for 2021.

Related Link: Did Galaxy Digital CEO Mike Novogratz Get His Terra (LUNA) Tattoo Removed Following Crypto Collapse?

Why It's Important: In May 2021, Galaxy Digital announced a $1.2 billion buyout of crypto custody firm BitGo, a deal that the Wall Street Journal reported at the time was the first $1 billion deal in the cryptocurrency industry.

More than a year after the deal was announced, Galaxy Digital has officially terminated the agreement. In a press release, Galaxy said it remains focused on its reorganization as a Delaware-based company and its subsequent uplisting to the Nasdaq.

"We are committed to continuing our process to list in the U.S. and providing our clients with a prime solution that truly makes Galaxy a one-stop shop for institutions," CEO Mike Novogratz said in a statement.

Related Link: Why Bitcoin Prices Are Higher Following July CPI Inflation Reading

Galaxy Digital has been hit hard by 2022's "crypto winter," and its Canadian shares are down 60.9% in the past year. Earlier this month, Galaxy reported its net losses more than tripled in the second quarter to $554.7 million.

Galaxy Digital was an early backer of Terra and its cryptocurrency Luna LUNA/USD and algorithmic stablecoin TerraUSD UST/USD, both of which completely collapsed earlier this year. Novogratz famously got a Luna-themed wolf tattoo on his arm just prior to the crypto's meltdown.

Benzinga's Take: It's likely Galaxy Digital was looking for an excuse to abandon its large BitGo deal, given BitGo's assets are probably not worth today nearly what they were when the deal was announced. In addition, Galaxy Digital has plenty on its plate with its upcoming Nasdaq uplisting.

Posted In: BitGoMike NovogratzCryptocurrencyM&ASmall CapMarkets

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