Digital asset manager Galaxy Digital is facing a law suit from crypto custodian BitGo after it called off a proposed $1.2 billion acquisition.

The deal, which was first announced back in May 2021, would have been one of the biggest in the crypto world but it was called off by Galaxy due to BitGo’s failure to provide audited financial statements for 2021, according to a Galaxy statement.

The move also comes on the back of a torrid time for cryptocurrencies, during which bitcoin has seen its value plummet by 65% from previous highs while a number of crypto exchanges have been forced to cut staff numbers.

According to Galaxy chief executive and founder Mike Novogratz, the firm still intends to pursue “strategic opportunities to grow in a sustainable manner” and will press ahead with plans to list in the US on the Nasdaq as well as the development of its Galaxy Oner Prime platform aimed at institutional investors.

The statement also claims that no termination fee is payable following the abandoned deal. However, this has not stopped BitGo issuing a claim for $100 million in damages, claiming that Galaxy Digital’s actions are “improper” and disputing Galaxy’s claims around a lack of paperwork as “absurd”.

“It is public knowledge that Galaxy reported a $550 million loss this past quarter, that its stock is performing poorly, and that both Galaxy and [Mr.] Novogratz have been distracted by the Luna fiasco,” stated R. Brian Thomas, a partner with Quinn Emanuel, the law firm hired by Bitgo to pursue the claim.

“Either Galaxy owes BitGo a $100 million termination fee as promised or it has been acting in bad faith and faces damages of that much or more,” added Thomas.

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