A Delaware court dismissed BitGo’s lawsuit against Galaxy Digital on June 12 for prematurely backing out of its offer to acquire the former for $1.2 billion.
BitGo had argued that the agreement was terminated before it was intended to end and is owed damages under the termination fee clause.
However, the court determined that Galaxy was justified in backing out of the deal because BitGo had failed to deliver audited financial statements in time as part of the due diligence process.
As such, Galaxy is not liable to pay damages under the termination fee clause of the agreement.
The company announced the decision on Twitter and said it can now go back to focusing on “upgrading the global financial system in a manner that promotes innovation and protects investors and consumers alike.”
‘Legislative Stalemate’
Like other crypto-focused companies, Galaxy Digital is also looking to move operations out of the U.S. amid the uncertain regulatory environment and the recent lawsuits against Coinbase and Binance.US.
The firm announced expansion plans in May and said at the time that the “legislative stalemate” regarding the crypto industry in the U.S. is making it challenging to operate in the country.
The situation has only been exacerbated by the SEC’s decision to bring legal action against the two biggest crypto exchanges in the world, according to the firm.
Galaxy Digital CEO Michael Novogratz expects the SEC lawsuits will take months to conclude and the industry is unlikely to see any regulatory clarity in the meantime.
He told a fintech conference held by Piper Sandler on June 7:
“There’s not going to be quick closure on any of this. It makes it very difficult to figure out what you should.”
According Novogratz, the high-profile collapses in the crypto industry have spurred U.S. regulators to take a hard stance towards the sector.
Novogratz said during the company’s quarterly results call in May:
“When I look at the short term, we still have a regulatory headache in the United States.”
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