Galaxy Digital, the cryptocurrency-focused financial services firm run by noted investor Michael Novogratz, has abandoned its plan to buy BitGo, saying the crypto custody specialist had failed to provide financial statements by a deadline of the end of July.
The acquisition was announced May 2021 for what was, at the time, about $1.2 billion in stock and cash. It was expected to close by the end of that year. BitGo had been required to deliver audited financial statements for 2021 by July 31 and didn't do so, Galaxy Digital said in a statement Monday.
BitGo didn't immediately respond to a request for comment.
The deal stalled in March as Galaxy Digital awaited approval from the U.S. Securities and Exchange Commission of its plan to reorganize as a Delaware-based company. At the time, the terms were tweaked to account for a decline in the price of Galaxy's Toronto-traded shares over the intervening period, giving BitGo's investors a larger stake in the merged company. Galaxy's stock has tumbled another 60% since then.
On Monday, Galaxy Digital said it still intends to list its shares on Nasdaq.
Last week, Galaxy reported a second-quarter net loss of $554.7 million as a result of a market downturn that has seen the market cap of cryptocurrencies plunge to $1.1 trillion from $2.8 trillion in 10 months.
UPDATE (Aug. 15, 11:31 UTC): Expands reason for cancelation in second paragraph; adds March developments in third; removes extra "i" from headline.
UPDATE (Aug. 15, 12:03 UTC): Added Galaxy's Q2 earnings result, share performance since end-March.
UPDATE (Aug. 15, 13:42 UTC:) Adds deal value and changes verb in headline to Abandons