Galaxy Digital: Novogratz speaks in court over failed $1.2B BitGo deal

Mike Novogratz, founder and CEO of Galaxy Digital, appeared in Delaware court on May 21–22, 2026 as the long-running legal dispute over the planned $1.2 billion acquisition of BitGo resurfaced. BitGo is seeking at least $100 million in termination damages after Galaxy terminated the deal in August 2022.

Court filings and public records show the transaction was announced in May 2021 and later aborted amid accounting and regulatory friction. Central to the dispute is whether BitGo delivered “Company 2021 Audited Financial Statements” as defined in the merger agreement and the impact of the U.S. Securities and Exchange Commission’s Staff Accounting Bulletin No. 121 (SAB 121) on those statements. The Delaware filings detail extensive exchanges between the parties over SEC comments and the timing and form of audit deliverables.

According to press reports citing Bloomberg coverage, Novogratz told the court that engagement with the SEC and its commentary made regulatory approval unlikely, while BitGo accuses Galaxy of failing to use reasonable efforts to close the deal and of concealing details of regulatory probes. The competing narratives focus on contract deadlines, auditor consents and whether the submitted financials were “file-ready.”

The case underscores how regulatory uncertainty — particularly around accounting for digital-asset lending and custody — can derail large-scale crypto M&A and create substantial contract risk. Market participants say such high-profile litigation can damp merger appetite and weigh on valuations for custody and institutional services businesses.

Legal analysts expect the dispute to hinge on the court’s interpretation of SAB 121’s applicability and the contractual definitions; an adverse ruling could crystallize a multi‑hundred‑million‑dollar liability or, alternatively, uphold Galaxy’s termination rights and limit BitGo’s recovery. Given the recent appeals and prior rulings in Delaware courts, the litigation may continue through extended appellate review.