Galaxy Digital announced on Monday morning that it had terminated its long-awaited acquisition of crypto custodian BitGo.
It said in a release that it had made the decision following BitGo's "failure to deliver, by July 31, 2022, audited financial statements for 2021 that comply with the requirements of our agreement." The release also said that no termination fee is payable.
"Galaxy remains positioned for success and to take advantage of strategic opportunities to grow in a sustainable manner,” said Mike Novogratz, CEO and founder of Galaxy Digital, in the release. “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.”
The Block contacted BitGo for comment.
The firm is currently in the process of reorganization to become a Delaware-based company, which will enable it to list on the Nasdaq exchange assuming it achieves regulatory approval. It is currently listed on the Toronto stock exchange under ticker GLXY.
It also plans to continue with the planned rollout of Galaxy One Prime, which is a product offering for institutional investors that includes custody services as well as trading, lending and derivative services, according to the release.
The news of the failed merger comes only a week after Galaxy Digital posted a $554 million loss in the second quarter. Despite the losses, the firm continues to raise capital with an eye toward deal making.
“I want to be offensive and we’re looking,” Novogratz said in a call with analysts after the earnings report.
The Block Research’s recent report shows that M&A transactions are on pace for a record year.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.