Galaxy, BitGo Face Off in Court Over $100M Claim

In 2022, Galaxy Digital terminated its planned acquisition of BitGo, citing the custody firm's "failure to deliver." That decision has now landed both companies in Delaware Chancery Court, with a $100 million claim at the center of the dispute. The case is one of the few public legal battles in crypto M&A and will test how acquisition agreements hold up when the target is a digital asset custodian operating in a fast-changing regulatory environment.\n\n## The $100 Million Dispute: What Galaxy Walked Away From\nThe original deal, announced in 2021, would have combined Galaxy's trading and lending business with BitGo's custody infrastructure. Galaxy walked away in 2022, arguing that BitGo had not met its contractual obligations. BitGo disagreed and filed for a $100 million termination fee. The exact nature of the alleged failure is the core of the litigation. Was it a missed financial target, a regulatory setback, or something else? The court will examine the contract's definition of "failure to deliver" and whether BitGo's performance qualified as a breach.\n\nCrypto M&A boomed during the 2021 bull run. Many deals included large termination fees to lock in acquirers. When the market turned in 2022, several buyers tried to exit. Galaxy's case is one of the few that has reached court instead of a confidential settlement. The outcome will set a precedent for how material adverse change clauses and performance provisions are interpreted in crypto-sector agreements.\n\n## Why This Case Matters for M&A in the Sector\nThe ruling will be closely watched by firms that have pending or contingent acquisition terms. A decision favoring BitGo would strengthen the bargaining power of targets in future deals, making it harder for acquirers to walk away without paying exit fees. A win for Galaxy would give buyers more room to argue that a crypto custodian's operational or regulatory missteps justify termination without penalty.\n\nThe broader legal backdrop is shifting. The CLARITY Act and other proposed regulations are beginning to define what qualifies as compliant operations for crypto firms. If the court's reasoning references evolving regulatory standards, the case could indirectly shape how compliance obligations are written into future M&A contracts. Both sides have signaled they are prepared to appeal a loss, which means the final interpretation could take months or years.\n\n## The Decision Point for Galaxy and BitGo\nA $100 million payout would be a material event for either firm. Galaxy Digital has been rebuilding its balance sheet after a challenging 2022, when crypto lending losses and market declines hit earnings. BitGo has been expanding its custody network and partnerships, including with stablecoin issuers. A cash infusion of that size would accelerate its growth plans, while a loss would force Galaxy to reassess its capital allocation.\n\nThe next concrete milestone is the court's ruling on summary judgment or a trial date. If the case proceeds to trial, testimony from Galaxy CEO Mike Novogratz and BitGo leadership could provide rare insight into the deal negotiations and the due diligence process that preceded the termination. The way the court interprets the phrase "failure to deliver" will directly affect how similar clauses are drafted in future crypto acquisitions.\n\nFor now, both companies remain in a holding pattern. The case is a reminder that the rapid dealmaking of the 2021 cycle is now producing legal aftershocks. The ruling -- whichever way it goes -- will become a reference point for every crypto M&A lawyer drafting a termination clause.