According to CoinDesk, cryptocurrency custodian BitGo has been granted permission to proceed with its lawsuit against financial services firm Galaxy Digital. This follows the reversal of a previous decision to dismiss BitGo's lawsuit over a failed $1.2 billion merger agreement by Delaware's Supreme Court.
R. Brian Timmons, a partner at the Los Angeles-based law firm Quinn Emanuel, which is representing BitGo, expressed satisfaction with the appeal outcome. He stated that they believe justice prevailed and are eager to advance the case in the Chancery Court.
BitGo initiated legal proceedings against Galaxy in August 2022, claiming $100 million in damages. The custodian firm alleged that Galaxy 'intentionally' violated its May 2021 merger agreement when it could no longer afford the $1.2 billion cost due to significant financial losses during the crypto bear market. Galaxy, on the other hand, attributed the dissolution of the agreement to BitGo's failure to provide certain audited financial statements on time, dismissing BitGo's claims as 'without merit.'
In June of the previous year, Delaware Chancery Court Vice Chancellor J. Travis Laster ruled in favor of Galaxy. He stated that Galaxy had a 'valid basis' to withdraw from the agreement as BitGo had provided the firm with 'non-compliant' financial documents.
However, following BitGo's appeal, the state's Supreme Court found the merger agreement's definition of 'financial statements' to be ambiguous. The court noted that both parties had offered reasonable interpretations of what constitutes acceptable documentation, leading to the reversal of the initial ruling. Galaxy Digital has not yet responded to requests for comment.