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A trial began the week of May 19 in Delaware's Court of Chancery, putting Galaxy Digital's Michael Novogratz and BitGo CEO Mike Belshe on opposing sides of a legal fight that has been grinding through the courts since 2022. At stake is a $100 million reverse termination fee that BitGo says Galaxy owes for improperly exiting a $1.2 billion merger agreement. Galaxy says it owed nothing, because BitGo failed to meet a contractual deadline for delivering audited financial statements.

The original deal, announced in May 2021, would have seen Galaxy pay $265 million in cash and issue 33.8 million shares, with the total transaction valued at approximately $1.2 billion, making it the largest crypto merger at that point in time. The terms also included a reverse termination fee: if Galaxy failed to close the deal by year-end 2022, it owed BitGo $100 million. Galaxy terminated the agreement on August 15, 2022, stating that BitGo had not delivered audited financial statements for fiscal year 2021 by the contractual deadline of July 31, 2022. Galaxy said the termination was valid and no fee was owed.

BitGo disagrees on both counts. The firm filed suit in September 2022, arguing that Galaxy used the financial statements issue as a pretext to escape a deal it could no longer afford. By mid-2022, Galaxy had reported a net loss of $554.7 million for Q2 alone, and its stock had dropped roughly 60 percent between March and August of that year. The broader crypto market also deteriorated sharply over that stretch, shedding more than $1.7 trillion in value over a 10-month window. BitGo's legal team has also alleged that Galaxy concealed the existence of ongoing U.S. regulatory investigations that could have affected its ability to close. "Galaxy failed to use reasonable efforts to get the deal done and hid from it details of probes by U.S. authorities that likely would have impacted their ability to complete the merger," according to BitGo's legal position as reported by Bloomberg.

Adding further context to the deal's deterioration, Galaxy had already renegotiated the merger terms in April 2022, increasing BitGo's share allotment from 33.8 million to 44.8 million shares to offset Galaxy's declining stock price. That adjustment illustrates the degree of financial strain on the transaction months before Galaxy formally walked away, and it underpins BitGo's argument that Galaxy was struggling to afford the deal well before the termination.

Galaxy has consistently denied those characterizations. "We will continue to vigorously defend ourselves and remain confident in the merits of our position in the case," a company spokesperson said after a 2024 appeals court ruling. The lower court initially sided with Galaxy in June 2023, when Vice Chancellor J. Travis Laster dismissed BitGo's claims with prejudice, finding that Galaxy had valid termination rights. The court's reasoning rested on two specific grounds: BitGo's April 2022 financial filings had failed to apply SEC guidance on digital asset custody accounting, and auditor-imposed filing restrictions in July 2022 had rendered the statements non-compliant with the contract's requirements. Those grounds were directly relevant to the question of whether Galaxy received qualifying audited financials before the deadline. That ruling was reversed in May 2024 when the Delaware Supreme Court found the merger agreement's definition of "financial statements" was ambiguous enough that both parties had plausible readings. The case was sent back for trial.

BitGo is not arriving at this trial as a distressed plaintiff. The custody firm completed its NYSE IPO in January 2026, raising $213 million at $18 per share at a valuation of approximately $1.96 billion (ticker: BTGO). The company custodies more than $64 billion in digital assets and processes an estimated 20 percent of all Bitcoin transactions globally. BitGo's lead counsel R. Brian Timmons of Quinn Emanuel has indicated the financial exposure could be significant, stating: "Galaxy reported a $550 million loss this past quarter...and faces damages of that much or more." Galaxy Digital, meanwhile, trades on the Nasdaq under the ticker GLXY at around $27.77 as of this week, within a 52-week range of $16.43 to $45.92.

There are no native tokens directly tied to either party in this dispute. BitGo is an infrastructure company without a native token, and the relevant market indicators here are equity prices rather than on-chain metrics.

The outcome of this trial carries weight beyond U.S. borders. BitGo has been actively expanding across Africa and the Middle East through a Dubai-registered unit that received a full custody and staking licence from Dubai's Virtual Assets Regulatory Authority in 2025, and subsequently a broker-dealer licence in October 2025. The unit, led by Managing Director Nick Coombs, explicitly targets African exchanges, fintechs, and banks as clients. BitGo's own research flags Nigeria and South Africa as leading markets for stablecoin adoption, driven by remittance flows and local currency volatility. Institutions and regulators in those markets vetting BitGo as a custody partner will, in this publication's assessment, be watching trial developments closely. Either a sizable judgment against Galaxy ordering payment of the termination fee, or a dismissal of BitGo's claims representing a significant legal defeat for the firm, could affect business relationships and regulatory perceptions in jurisdictions where reputational credibility functions as a de facto licence requirement.

For legal practitioners and deal-makers across South Asia and Africa, the court's eventual interpretation of "audited financial statements" and "reasonable efforts" obligations in the merger contract could also inform how future acquisition agreements are structured in the sector. Delaware Chancery Court decisions carry persuasive weight in many common law jurisdictions. The trial outcome is pending, and no verdict timeline has been confirmed at the time of publication.