Despite a lawsuit hanging over their heads, Galaxy Digital chose BitGo as its partner in a new staking offering. Assets like ETH, SOL, and ADA to feature.
Putting their differences aside, cryptocurrency trading company Galaxy Digital (GLXY) and regulated custody specialist BitGo Trust have decided to collaborate on cryptocurrency staking. For more context, the Mike Novogratz-led firm plans to leverage BitGo’s clientele to expand its staking and validator services.
BitGo Investors to Receive Staking Rewards From Galaxy Digital
Galaxy’s blockchain staking services currently handle as much as $4 billion billion in staked crypto assets. Like in every other staking business that involves locking up crypto tokens to support the running of blockchain, BitGo investors who plunge their funds into the venture are eligible to receive staking rewards at the end of a stipulated trading period.
Their assets would serve as loans to Galaxy Digital. It is worth noting that Galaxy has been working on its staking services for the last few months.
The company even acquired all the assets of blockchain node operator CryptoManufaktur LLC in 2024. It intends to scale its Ethereum assets under stake by over 40%. In light of the late alliance, both entities issued a joint statement;
“Galaxy and BitGo both see an incredible opportunity to further drive adoption of digital assets and remain committed to strategic collaboration despite ongoing legal proceedings, which are a separate matter.”
Legal Debacle Between Galaxy Digital and BitGo
BitGo and Galaxy Digital have a disagreement that dates back as far back as 2022. The digital asset trust sued Galaxy Digital almost three years ago for withdrawing its interest in a previously announced acquisition deal. BitGo claimed that the American crypto investment intentionally breached the acquisition contract from May 2021.
In return, it requested Galaxy Digitalpay over $100 million in compensation for damages. Their initial merger deal was worth $1.2 billion at the time.
In court, Galaxy argued that BitGo failed to produce its audited 2021 financial records by the due date. Unfortunately, it was around the time when the harsh crypto winter hit the market, leaving many firms like Celsius Network and Voyager Digital in bankruptcy.
Hence, it was necessary at the time to apply extreme caution when considering investments among firms. Though the initial court dismissed BitGo’s claims in 2023, the Delaware Supreme Court reversed the decision after an appeal, citing the ambiguity in the $1.2 billion merger agreement terms.
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