Tuesday, May 30, 2023
HomeUncategorizedGalaxy Digital abandons $1.2 billion acquisition of BitGo

Galaxy Digital abandons $1.2 billion acquisition of BitGo

After BitGo failed to provide its audited financial statements for the year 2021, Galaxy Digital announced on Monday that it had canceled the proposed $1.2 billion acquisition of the custodian of crypto.

Per the release, BitGo’s failure to deliver the accounts by July 31, 2022, pursuant to the acquisition agreement, gives Galaxy the right to opt out without termination fees.

Mike Novogratz, CEO and Founder of Galaxy, said, “Galaxy remains positioned for success and to take advantage of strategic opportunities to grow sustainably. We are committed to continuing our US enrollment process and providing our customers with a best-in-class solution that truly makes Galaxy a one-stop-shop for institutions,”

The deal was announced in May 2021

The deal was originally announced in May 2021 with the goal of expanding Galaxy’s reach as a platform- crypto-based form of financial services. He revealed that he will finance the acquisition by paying $265 million in cash and issue 33.8 million shares. After which, 10% of the company will be owned by BitGo shareholders.

However, in late March, Galaxy announced a delay in the acquisition as the companies renegotiated the deal for BitGo shareholders to own approximately 12% of the company.

Meanwhile, despite pulling out of the deal, Galaxy aims to complete the proposed reorganization and domestication to become a Delaware-based company and then list on Nasdaq, underlines the press release. This will be at the end of the SEC’s evaluation and subject to the exchange’s approval of this listing. term performance for investors. This includes the planned rollout of Galaxy One Prime, a new product offering for institutional investors that will integrate trading, lending and derivatives as well as access to qualified custody through a unified technology platform.

Galaxy announced second quarter losses

The news also follows the second quarter results of Galaxy which reported an overall net loss of $554.7 million on falling digital asset prices. That said, as of June 30, 2022, the company still had a strong liquidity position of $1.5 billion according to the earnings call.

That said, Novogratz believes the company is still well positioned to weather prolonged volatility and seize tactical openings to grow Galaxy sustainably.

In the meantime, earlier this month, BitGo also made major changes to its management team by announcing the promotion of Chen Fang to COO and the appointment of Victor Tsou to Vice- president of engineering.

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here .


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