Galaxy Digital pulls an Elon and pulls out of $1.2bn buyout deal | Investor’s Business Daily

Cryptocurrency News: Galaxy Digital has been on crypto investors’ radar after it was revealed on Monday that it was exiting the $1.2 billion deal to buy BitGo. Galaxy claimed BitGo management failed to provide audited financial statements. The institutional digital asset services company plans to charge a $100 million break-up fee. News of the Acala hack also continued as the financial network burned $1.29 billion of its stablecoins, which were mistakenly minted during a hacking exploit to reclaim aUSD’s peg. And in an overall look at the crypto blockchain markets, a new report predicts that the global fintech blockchain market will reach $8.7 billion by 2026.

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Galaxy Digital exits $1.2 billion BitGo acquisition

Digital asset investment and financial services firm Galaxy Digital announced it is closing its $1.2 billion acquisition of BitGo. Galaxy claims the institutional digital asset firm failed to provide audited financial statements for 2021 as required by last May’s agreement.

BitGo fired back, saying Galaxy Digital improperly terminated the deal, which was not scheduled to expire by the end of this year. It’s also alleged that Galaxy owes the company a $100 million reverse break fee, which was promised in March 2022 to extend the merger agreement. According to Galaxy Digital, there is no cancellation fee required.

BitGo hired the law firm Quinn Emanuel to take legal action. And partner R. Brain Timmons claims Galaxy is only pulling out because it posted a $550 million loss last quarter from the LUNA crash. “Either Galaxy owes BitGo a $100 million termination fee as promised, or it acted in bad faith and faces damages of that amount or more,” Timmons said.

BitGo CEO Mike Belshe dismissed Galaxy’s concerns about the company’s financial health. He noted that BitGo ended 2021 with $64 billion in assets under custody. He claimed customer growth tripled over the year, with momentum continuing into 2022, he says.

“I’ve never been more optimistic about our future,” Belshe said.

In the meantime, Galaxy Digital plans to reorganize itself as a Delaware-based company and is seeking a listing on the Nasdaq, pending SEC and exchange review and approval of the listing. Galaxy Digital shares are currently traded on the Toronto Stock Exchange. The company is also launching its own in-house digital asset investment service for institutional clients called Galaxy One Prime. “We are committed to continuing our US listing process and providing our clients with a best-in-class solution that truly makes Galaxy a one-stop shop for institutions,” said CEO Mike Novogratz.

Acala Burns hacked stablecoins

Late Monday night, the developers of the Acala network announced that they had “burned” — taken out of circulation — 1.29 billion of its aUSD stablecoins that had been mistakenly minted in a hack. Sunday night’s exploit caused a USD to depegge, losing more than 99% of its value and falling below 1 cent. Hackers used a flaw to mint the tokens from one of Acala’s liquidity pools, which serve as collateral to sustain stablecoin prices. The Polkadot blockchain-based aUSD almost regained its peg Monday morning, climbing back up to 92 cents as of writing.

The global fintech market is projected to reach $8.7 billion by 2026

A new report from ResearchAndMarkets.com predicts that the market for financial services using blockchain technology will reach $8.7 billion in the next four years. The FinTech Blockchain – Global Market Trajectory & Analytics report forecasts that the global fintech blockchain market will exhibit a CAGR of 44.8% for this period, growing from $1.3 billion in 2022 in will skyrocket.

ResearchAndMarkets notes that fintech blockchain services have grown rapidly during the Covid pandemic. And they have been fueled by rising consumer demand for Bitcoin investments and greater needs for cross-border payment, security, and compatibility within the financial services industry ecosystem. The US market is valued at US$451.6 million in 2022, accounting for 32.8% of the global market share.

However, researchers expect that China will take the lead in the next few years. China’s market is expected to reach US$874 million by 2026, with a compound annual growth rate of 52.6% for that period.

Bitfarms reports results

Canadian bitcoin miner Bitfarms reported a net loss of 70 cents per share for its second quarter Monday morning after losing 2 cents last year. Total sales increased 14% to $42 million during that period. Bitfarms mined 1,257 in the quarter, up from 759 last year. But the average cost of production increased by $900 to $9,900 per bitcoin. The company sold 3,357 in the quarter for revenue of $69 million. Bitfarms also posted a $77.9 million loss on the sale of its digital assets. And a $70.48 million loss revaluing its digital assets. As of June 30, Bitfarms had $46 million in cash and 3,144 BTC. Bitfarms shares were up about 7% at $2.15 by Monday’s close, but quickly fell more than 8% early Tuesday.

Football sponsorship by Zoomex

Over the weekend, Spanish football league La Liga’s Villarreal CF added Zoomex as their “official crypto exchange partner” for the 2022/2023 season and will feature its logo on the back of the team’s kits. Financial details were not disclosed, but Zoomex is just the latest cryptocurrency company to jump into sports sponsorship. Crypto firms have spent more than $2.4 billion on sports marketing over the past 18 months (as of Aug. 5), according to Bloomberg data.

Read more cryptocurrency news

What is cryptocurrency?In its simplest terms, cryptocurrency is internet money and digital assets. Cryptocurrencies have grabbed headlines for staggering valuations — and crashes. Bitcoin surged to an all-time high of $69,000 last November but has fallen freely… Read More

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