BitGo’s $100M Suit Against Galaxy Digital Can Proceed, Delaware Supreme Court Rules

Cryptocurrency custodian BitGo will get a fresh chance to sue financial services firm Galaxy Digital over the two companies’ failed $1.2 billion merger agreement after Delaware’s Supreme Court reversed an earlier ruling to dismiss BitGo’s lawsuit.

“We believe justice prevailed on appeal, and we are delighted to move forward with this case in the Chancery Court,” said R. Brian Timmons, partner at Los Angeles-based law firm Quinn Emanuel, which is representing BitGo in this case.

BitGo filed suit against Galaxy in August 2022, seeking $100 million in damages and alleging that Galaxy “intentionally” breached its May 2021 merger agreement when it could no longer afford the $1.2 billion price tag after experiencing massive financial losses during the crypto bear market. Galaxy blamed the breakup on BitGo’s failure to provide certain audited financial statements on time and said BitGo’s claims were “without merit.”

Last June, Delaware Chancery Court Vice Chancellor J. Travis Laster ruled that Galaxy had a “valid basis” to pull out of the agreement, because BitGo gave the firm “non-compliant” financial documents.

After BitGo appealed the ruling, the state’s Supreme Court found that the merger agreement’s definition of “financial statements” was ambiguous, and that both parties “have proffered reasonable interpretations” of acceptable documentation, and reversed the ruling.

“We will continue to vigorously defend ourselves and remain confident in the merits of our position in the case,” a Galaxy spokesperson told CoinDesk.

UPDATE (May 25, 2024 at 00:35 UTC): Updated to include a statement from Galaxy Digital.