The chief executives of Galaxy Digital and Bitgo faced off in Delaware Chancery Court this week, with each side laying out its version of why a $1.2 billion merger fell apart last year. Galaxy Digital founder Mike Novogratz and Bitgo CEO Mike Belshe testified in the ongoing legal battle that could end with a damage award of at least $100 million.
The Merger That Wasn't
The two companies signed a merger agreement in May 2021, at a time when crypto markets were booming and Bitgo, a digital asset custodian, was seen as a key piece of Galaxy's expansion plans. The deal valued Bitgo at $1.2 billion, a price that reflected the sector's frothy optimism. But by 2022, the crypto winter had set in, and Galaxy Digital walked away from the agreement. Bitgo didn't let the decision slide. The company sued, claiming Galaxy Digital had no right to terminate the deal.
What the Court Is Hearing
The core dispute revolves around the termination clause in the merger contract. Galaxy Digital argues that Bitgo failed to meet certain financial targets and that the market conditions had changed so dramatically that the deal was no longer viable. Bitgo counters that Galaxy Digital simply got cold feet and used a technicality to back out. During testimony, Novogratz and Belshe offered sharply different accounts of the negotiations and the reasons for the collapse. The court is now tasked with sorting through the details of a contract signed nearly three years ago.
Damages and What Bitgo Wants
Bitgo is seeking at least $100 million in damages, though the final figure could climb if the judge finds that Galaxy Digital acted in bad faith. The company argues that it lost valuable time and business opportunities while the merger was pending, and that Galaxy's abrupt termination left it in a precarious position. Galaxy Digital has not yet presented its full defense on damages, but has indicated it will argue that Bitgo's losses are exaggerated.
What Happens Next
The trial is expected to continue for several more days, with additional witnesses and expert testimony lined up. Both sides have signaled they are prepared for a long fight, but the Delaware Chancery Court is known for moving efficiently. A ruling could come within weeks after the final arguments are submitted. For now, the question of who bears responsibility for a billion-dollar deal that never happened remains unanswered.
