San Francisco, Aug 16, 2022, IANS

San Francisco, Aug 16 (IANS) After crypto financial services and investment management firm Galaxy Digital terminated the $1.2 billion acquisition of BitGo, the digital asset trust company has called the decision "absurd" and demanded $100 million in damages from Galaxy Digital.

The proposed acquisition was the global crypto industry's first $1 billion deal, which fell off amid the global crypto meltdown.

BitGo said late on Monday that it intends to hold Galaxy Digital legally responsible for its improper decision to terminate the merger agreement.

"It was not scheduled to expire until December 31, 2022, at the earliest and to not pay the $100 million reverse break fee it had promised back in March 2022 in order to induce BitGo to extend the merger agreement," said the company.

BitGo has hired litigation powerhouse Quinn Emanuel to take appropriate legal action.

"The attempt by Mike Novogratz (CEO) and Galaxy Digital to blame the termination on BitGo is absurd," said R Brian Timmons, a partner with Quinn Emanuel.

"BitGo has honoured its obligations thus far, including the delivery of its audited financials. It is public knowledge that Galaxy reported a $550 million loss this past quarter, that its stock is performing poorly, and that both Galaxy and Novogratz have been distracted by the Luna fiasco," Timmons mentioned.

Either Galaxy owes BitGo a $100 million termination fee as promised or it has been acting in bad faith and faces damages of that much or more, the legal firm warned.

Galaxy Digital had claimed that no termination fee is payable in connection with the decision.

BitGo's founder and CEO Mike Belshe said that their business has continued to grow and its operational and strategic outlook remain strong.

"BitGo ended 2021 with over $64 billion in assets in custody. Client growth was strong and BitGo grew by over 3 times year over year and client growth continues into 2022, which underscores the need for BitGo to remain focused on our mission," Belshe mentioned.

BitGo provides institutional investors with custody, liquidity, and security solutions.