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Galaxy Digital cancels $1.2 billion acquisition of BitGo – londonbusinessblog.com

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The Crypto sector’s first $1 billion deal, announced at the peak of the token price spike, is being dissolved as the market reverses much of its profits.

Galaxy Digital said Monday it has terminated its proposed $1.2 billion acquisition of crypto custodian BitGo, a high-profile deal it announced last year, after the San Francisco-based startup failed to provide its audited financial statements for the year 2021. .

BitGo’s alleged failure to provide the financial statements violated the agreement the two companies agreed to last year, Galaxy Digital said in a public statement, and the termination of the deal will not incur any fees for the company, it said. Shares of Galaxy Digital, which trades in Toronto, jumped on the news.

The proposed acquisition would be the crypto sector’s first $1 billion deal. The BitGo purchase was positioned to help Galaxy Digital broaden its offering for institutional investors by adding services such as investment banking, prime lending and tax services. BitGo counts Galaxy Digital, Goldman Sachs, Valor Equity Partners, Craft Ventures, DRW and Redpoint Ventures among its backers.

“The power of the technology, solutions and people we will have as a result of this acquisition will unlock unique value for our customers and drive long-term growth for our combined business. We are delighted to welcome Mike Belshe and the talented BitGo team to Galaxy Digital,” said Mike Novogratz, chief executive officer and founder of Galaxy Digital at the time.

Novogratz (pictured above) said Monday: “Galaxy remains positioned for success and to take advantage of strategic opportunities to grow sustainably. We are committed to continuing our process to the US and providing our customers with a premium solution that Galaxy is truly a one-stop shop for institutions.”

The announcement follows Galaxy Digital which reported a loss of $554.7 million in the second quarter, up from a loss of $183 million a year ago, earlier this month. In the company’s earnings call, Novogratz said Galaxy Digital had about $1 billion in cash on hand.

Galaxy Digital said it is awaiting SEC review and exchange approval for a Nasdaq listing.

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