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>>The Delaware Supreme Court has authorized BitGo's $100 million lawsuit against Galaxy Digital to proceed.

The Delaware Supreme Court has authorized BitGo's $100 million lawsuit against Galaxy Digital to proceed.

crypthub

1/24/2025, 11:49:24 AM

Delaware Supreme Court Overturns Lower Court's Dismissal of BitGo's Lawsuit

The Delaware Supreme Court has reversed a lower court's decision to dismiss BitGo's $100 million lawsuit against Galaxy Digital, siding with BitGo and allowing the case to proceed. The lawsuit stems from a failed merger attempt between the two companies.

Ambiguous Merger Agreement at the Heart of the Dispute

The court found that the language in the merger agreement was ambiguous, leading to their decision to send the case back for further evidence to resolve the uncertainty. This development gives BitGo a new chance to pursue legal action against Galaxy Digital for allegedly breaching the acquisition agreement.

Background of the Dispute: Failed Acquisition and Accusations

BitGo initially filed suit in August 2022, accusing Galaxy of intentionally breaking the merger deal. Galaxy responded by terminating the agreement, claiming BitGo's failure to provide audited financial statements from 2021 as the reason.

Legal Proceeding and Recent Developments

The Delaware Chancery Court had previously dismissed BitGo’s case with prejudice in June 2023, but the recent Supreme Court ruling has reversed this decision. Representing BitGo, R. Brian Timmons expressed satisfaction with the outcome and confirmed that the case would now continue in the Delaware Chancery Court. Galaxy, meanwhile, affirmed their commitment to vigorously defending themselves against the allegations.

Historical Context: Announcement and Fallout of the Acquisition Deal

Galaxy Digital initially announced its acquisition of BitGo in May 2021. However, following FTX's collapse in November 2022, Galaxy disclosed a significant exposure to the troubled exchange, leading to uncertainties in the market.

Market Performance and Future Outlook

Despite a brief dip, Galaxy Digital stock has shown resilience, surging 23.5% since the start of the year, following the approval of spot Bitcoin ETFs. Steve Kurz, Global Head of Galaxy Asset Management, predicts increased involvement from financial institutions in spot Bitcoin ETFs over the next year.