Galaxy's Novogratz Testifies in Failed $1.2B BitGo Merger Trial
Mike Novogratz testified in Delaware court over Galaxy's canceled $1.2B BitGo merger, as BitGo seeks a $100M termination fee. Galaxy claims BitGo failed to provide financials; BitGo argues Galaxy used an SEC probe as pretext. The trial ends this week.
Quick Take
Galaxy terminated the $1.2B merger with BitGo in 2022 citing regulatory issues.
BitGo demands a $100M termination fee; Galaxy alleges late financial disclosures.
Novogratz testified Galaxy was not under SEC probe and pushed for the deal.
The judge's ruling on the fee is expected after the trial ends this week.
Market Impact Analysis
NeutralThe legal dispute is specific to two companies and unlikely to move crypto markets significantly.
Speculation Analysis
Key Takeaways
- Galaxy canceled its $1.2B merger with BitGo in August 2022, triggering a legal battle over a $100M termination fee.
- Mike Novogratz testified that regulatory hurdles under the SEC made approval unlikely, while BitGo missed deadlines for financial disclosures.
- BitGo CEO claimed Galaxy used an SEC probe as a pretext, but Novogratz denied Galaxy was under investigation.
- The trial concludes this week, with a judge’s decision on the $100M fee expected shortly.
- The dispute sets a precedent for crypto M&A termination fees amid shifting regulatory landscapes.
What Happened
Mike Novogratz testified in Delaware Chancery Court on Tuesday over Galaxy Digital’s failed $1.2 billion merger with crypto custodian BitGo. The deal, announced in 2021 as the largest crypto merger at the time, collapsed in August 2022. BitGo now demands a $100 million termination fee, claiming Galaxy backed out without cause. Galaxy argues BitGo failed to deliver audited financials by the contractual deadline. The trial wraps up this week, and a judicial ruling will determine if Galaxy must pay.
The Numbers
The merger, valued at $1.2 billion in 2021, would have created a crypto services giant. When Galaxy terminated the deal in August 2022, it cited BitGo’s failure to provide 2021 audited financials by the July 2022 deadline. BitGo seeks a $100 million reverse breakup fee outlined in the merger agreement. Novogratz testified that the SEC’s stance on crypto made regulatory approval a long shot, but the core dispute hinges on whether BitGo met its disclosure obligations. The six-day trial, ending this week, will decide the payout.
Why It Happened
The merger collapsed amid a crypto winter triggered by Terra’s implosion, which erased $40 billion in value. Galaxy’s stock and financial position worsened, making the deal less attractive. Simultaneously, the SEC under Gary Gensler ramped up crypto enforcement, complicating regulatory approval. Novogratz admitted he pushed for the deal but acknowledged the regulatory environment made it “very difficult.” BitGo’s alleged delays in delivering financial audits—complicated by SEC accounting rules—gave Galaxy grounds to walk. BitGo counters that Galaxy used an SEC probe as a pretext.
Broader Impact
The case could set a benchmark for crypto M&A disputes, clarifying force majeure or regulatory out clauses in merger contracts. A ruling in BitGo’s favor may embolden targets to demand breakup fees when buyers cite regulatory uncertainty. Conversely, a Galaxy win could encourage acquirers to walk if targets miss financial deadlines, even in fast-moving crypto markets. The outcome may influence deal structures in future crypto acquisitions.
What to Watch Next
- The judge’s ruling on the $100M termination fee, expected in the coming weeks.
- Potential appeals or settlement negotiations regardless of the verdict.
- How the decision shapes due diligence and breakup fee clauses in pending crypto M&A deals.
This article is for informational purposes only and does not constitute financial advice.
Always late to trends?
Join for the latest news, insights & more.
Disclaimer: Bytewit is an independent media outlet that delivers news, research, and data.
© 2026 Bytewit. All Rights Reserved. This article is for informational purposes only.
