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Galaxy Digital to acquire BitGo for $ 1.2 billion

 

BitGo

Galaxy Digital, the cryptocurrency-focused financial services company managed by Michael Novogratz, announced that it has agreed to buy BitGo, the latter that specializes in preserving cryptocurrencies and is subject to US regulation and law.


According to the source, the deal was valued at $ 1.2 billion between stocks and cash.


Under the terms of the deal, BitGo’s shareholders will receive 33.8 million newly issued shares of common stock Galaxy Digital and about $ 265 million in cash, which means about $ 1.2 billion based on the closing price of Galaxy Digital’s stock on May 4.


Last month, leaks emerged that the two companies were in talks about a possible deal.


Mr. Novogratz, CEO and founder of Galaxy Digital, told after the takeover announcement:


The acquisition of “BITGO” establishes “GALAXY DIGITAL” as a one-stop shop for enterprises and greatly accelerates our mission to institutionalize cryptocurrency ecosystems and blockchain technology.

 

The deal is another sign of intensifying mergers and acquisitions in the cryptocurrency industry, after Paypal agreed in March to buy Curv, a cryptocurrency custodian.


The new acquisition also highlights the importance of custodians for this category of digital currencies.


Cryptocurrencies are more like cash or diamonds than a certificate of ownership.


The new acquisition and more specifically, will offer Galaxy the potential to become a prime broker.


Where a company cannot be a prime middleman without tutelage.


Last year, BitGo was reported to be in acquisition talks with the financial technology giant Paypal, who offered up to $ 750 million in cash for its acquisition, but it appears that the deal was not concluded for unknown reasons.


To be the acquisition of BitGo by Galaxy.


BitGo shareholders will own approximately 10% of the Galaxy.


BitGo CEO Mike Belchi will become the CEO of Galaxy Digital and a member of the company's board of directors.


The deal is expected to close in the fourth quarter of 2021.

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