Galaxy Digital Drops $1.2 billion acquisition plan of crypto custody company BitGo
August 16, 2022 8:31 AM
The $1.2 billion acquisition was set to close by the end of 2021 when it was first revealed.
The cryptocurrency-focused financial services company Galaxy Digital, led by well-known investor Michael Novogratz, has given up on its ambition to acquire BitGo, claiming the latter failed to meet a deadline of the end of July by submitting financial documents.
The deal was announced in May 2021 and cost approximately $1.2 billion in stock and cash at the time. By the end of that year, it was anticipated to be over. By July 31, BitGo was supposed to produce audited financial statements for 2021, but it failed to do so, according to a statement released by Galaxy Digital on Monday.
As Galaxy Digital awaits the U.S. Securities and Exchange Commission's approval of its intention to restructure as a Delaware-based firm, the acquisition came to a standstill in March. The parameters were changed at that time to provide BitGo's investors a bigger ownership in the amalgamated business and account for a drop in the price of Galaxy's Toronto-traded shares over the interim period. Since then, the stock of Galaxy has dropped another 60%.
Galaxy Digital announced on Monday that it still plans to float its shares on Nasdaq.
As a result of a market collapse that saw the market valuation of cryptocurrencies fall to $1.1 trillion from $2.8 trillion in 10 months, Galaxy last week disclosed a second-quarter net loss of $554.7 million.