The collapse has left his firm facing a demand from BitGo Holdings (NYSE:BTGO) for at least $100 million, with a Delaware judge set to decide whether it owes that fee or more.

The 2022 deal was the largest the crypto industry had ever proposed, according to Bloomberg, and BitGo argues Galaxy failed to use reasonable efforts to close it.

What Really Killed The Deal

The plan was for Galaxy to buy BitGo, a firm that stores and secures crypto for big institutions, and list the combined business on Nasdaq.

That listing required clean, audited financials to clear the SEC.

Galaxy says BitGo could not produce those financials in time, so the deal died on a technicality.

Novogratz blamed an accounting rule the SEC issued partway through, testifying he pushed to close right up until it became impossible.

Belshe, BitGo’s CEO, told the judge his firm handed over everything the agreement required.

BitGo went public on its own this January, becoming the first major crypto IPO of 2026.

Galaxy’s own conduct is also part of the case. It traded heavily in the Luna token, pocketing nearly $400 million before the currency collapsed to zero, then paid $200 million to settle a New York probe that found it promoted Luna without disclosing plans to sell.

BitGo argues that regulatory heat around Galaxy, not any problem with its own books, is what sank the merger.

What The Crowd Says About Bitcoin Now

The deal era was peak crypto euphoria, and Bitcoin (CRYPTO: BTC) has cooled sharply from its more recent highs. It trades near $77,000 today, roughly $32,000 below where it sat a year ago.

The betting markets tell the same story. Polymarket traders give the token just an 8% chance of reaching $150,000 before 2027, and just a 35% chance it outperforms gold this year.

The litigation is a relic of a moment when crypto valuations looked limitless. The contracts suggest a market that has since recalibrated hard, and whether the Delaware ruling moves Galaxy shares may matter less than where Bitcoin goes next.

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