BitGo’s $100 million lawsuit against Galaxy Digital has been given new life after Delaware’s Supreme Court overturned a lower court’s ruling that dismissed the case. The court found that the language in the merger agreement between BitGo and Galaxy Digital was “ambiguous,” allowing BitGo to present extrinsic evidence to resolve the ambiguity. This decision, which was made on May 22, opens the door for BitGo to pursue its claims against Galaxy Digital.
BitGo initially filed the lawsuit in August 2022, alleging that Galaxy Digital had intentionally breached the acquisition agreement. The dispute arose after BitGo failed to provide audited financial statements from 2021, leading Galaxy Digital to terminate the deal. However, BitGo argued that Galaxy Digital did not have the right to end the agreement.
“We believe justice prevailed on appeal and we are delighted to move forward with this case in the Chancery Court,” said R. Brian Timmons, a partner at law firm Quinn Emanuel, representing BitGo.
The Delaware Court of Chancery had previously dismissed BitGo’s case in June 2023, stating that Galaxy Digital had the right to terminate the acquisition. Galaxy Digital responded to the Supreme Court’s decision by stating that it would “continue to vigorously defend ourselves” and expressed confidence in the merits of their case.
Galaxy Digital, led by Mike Novogratz, had announced its intention to acquire BitGo in May 2021. However, the collapse of cryptocurrency exchange FTX in November 2022 revealed that Galaxy Digital had approximately $77 million in exposure to the firm before FTX filed for bankruptcy.
This latest development in the legal battle between BitGo and Galaxy Digital highlights the ongoing disputes that can arise in the cryptocurrency industry. Both parties will now have the opportunity to present their evidence and arguments in the Chancery Court as the case moves forward.