Why are Galaxy Digital and BitGo in court?

Galaxy Digital and BitGo are fighting over a failed $1.2 billion acquisition deal announced in 2021. BitGo claims Galaxy improperly walked away from the merger and now owes at least $100 million in damages and breakup fees.

Why did Galaxy Digital cancel the BitGo acquisition?

Galaxy said in 2022 that BitGo failed to provide audited 2021 financial statements in a format required under the merger agreement by the July 31 deadline. Galaxy argued this breach allowed it to terminate the deal without paying a reverse breakup fee.

What is BitGo accusing Galaxy Digital of in court?

BitGo claims Galaxy failed to use “reasonable efforts” to complete the merger and allegedly hid details about US regulatory investigations. BitGo argues those issues may have affected Galaxy’s ability to close the transaction.

What is a reverse breakup fee in mergers and acquisitions?

A reverse breakup fee is money paid by the buyer if it fails to complete an agreed acquisition under certain conditions. In this case, BitGo says Galaxy owes a $100 million fee after abandoning the takeover.

How big was the original Galaxy Digital and BitGo deal?

Galaxy first agreed to acquire BitGo in May 2021 in a transaction valued at roughly $1.2 billion. The deal was announced during the crypto bull market when valuations and merger activity across the sector were rapidly increasing.

Who are Michael Novogratz and Mike Belshe in this dispute?

Michael Novogratz is the billionaire founder and chief executive of Galaxy Digital, while Mike Belshe is the co-founder and chief executive of BitGo. Under the original merger plan, Belshe was expected to become Galaxy’s deputy CEO and join its board.

Why does this lawsuit matter for the crypto industry?

The case could shape how future crypto mergers are structured, especially around disclosure requirements, financial reporting standards and breakup fee protections. It also highlights how legal and regulatory risks can disrupt major crypto deals.

How could the Galaxy-BitGo legal battle affect investor sentiment?

The dispute may reinforce concerns about execution risks in crypto mergers and acquisitions. Investors could become more cautious around companies pursuing large crypto deals without clear regulatory certainty or audited financial transparency.

Image for illustrative purposes only. Not a real photo.

Galaxy and BitGo clash in court over $100M fee

Written by Liezl GambePublished May. 22 2026Last Updated May. 22 2026

Galaxy Digital and crypto custodian BitGo have entered a courtroom battle over a disputed $100 million breakup fee tied to their collapsed $1.2 billion merger agreement.

BitGo is seeking at least $100 million in damages after Galaxy, founded by billionaire investor Michael Novogratz, terminated the acquisition in August 2022 following more than a year of negotiations.

Bloomberg reported that BitGo claimed in court filings that:

“Galaxy failed to use reasonable efforts to get the deal done and hid from it details of probes by U.S. authorities that likely would have impacted their ability to complete the merger.”

Galaxy argued in 2022 that BitGo failed to deliver audited 2021 financial statements by the July 31 deadline in a format compliant with the merger agreement, which it said justified ending the transaction without paying a termination fee.

BitGo has maintained since the collapse of the deal that Galaxy either owes the agreed $100 million reverse breakup fee or potentially greater legal damages linked to the failed acquisition.

Galaxy first announced plans to acquire BitGo in May 2021 during the height of the crypto bull market, with BitGo co-founder and chief executive Mike Belshe expected to join Galaxy as deputy chief executive and board member after completion.

The legal dispute comes as crypto firms continue facing heightened regulatory scrutiny and tighter dealmaking conditions following the market downturn that unfolded after the failed merger agreement.

The outcome of the case could influence how future crypto mergers are structured, particularly around disclosure obligations, audited financial requirements and protections tied to reverse termination fees.