BitGo’s $100M Lawsuit Against Galaxy Digital Approved to Proceed by Delaware Supreme Court

The Delaware Supreme Court’s ruling reverses last year’s lower court decision to dismiss the lawsuit.

Cryptocurrency custodian BitGo will have a new opportunity to sue financial services firm Galaxy Digital over their failed $1.2 billion merger agreement. This comes after Delaware’s Supreme Court overturned a previous decision 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, a partner at the Los Angeles-based law firm Quinn Emanuel, which is representing BitGo in the case.

BitGo filed a lawsuit against Galaxy in August 2022, seeking $100 million in damages and accusing Galaxy of “intentionally” breaching their May 2021 merger agreement. BitGo claimed that Galaxy could no longer afford the $1.2 billion price tag due to substantial financial losses during the crypto bear market. In response, Galaxy attributed the merger’s collapse to BitGo’s failure to provide specific audited financial statements on time, labeling BitGo’s allegations as “without merit.”

Last June, Delaware Chancery Court Vice Chancellor J. Travis Laster ruled that Galaxy had a “valid basis” to withdraw from the agreement because BitGo provided “non-compliant” financial documents.

Following BitGo’s appeal, the state’s Supreme Court found the merger agreement’s definition of “financial statements” to be ambiguous, noting that both parties “have proffered reasonable interpretations” of acceptable documentation, and subsequently 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.