Delaware’s Supreme Court has overturned a lower court ruling that had dismissed a $100 million lawsuit filed by BitGo against Galaxy Digital following a failed acquisition. In a May 22 filing, the Supreme Court of Delaware stated that the language in the $1.2 billion BitGo-Galaxy Digital merger agreement, which Galaxy terminated in August 2022, was “ambiguous.” The court decided to reverse the Delaware Chancery Court’s decision to allow for the consideration of extrinsic evidence to resolve this ambiguity.

The successful appeal, initially filed on February 7, suggests that BitGo may proceed with its lawsuit against Galaxy Digital. BitGo's August 2022 lawsuit alleged that Galaxy intentionally breached the acquisition agreement. Galaxy argued that it had the right to terminate the deal due to BitGo's failure to provide audited financial statements from 2021.

“We believe justice prevailed on appeal and we are delighted to move forward with this case in the Chancery Court,” said R. Brian Timmons, a partner at the law firm Quinn Emanuel, which represents BitGo, in a statement to Cointelegraph.

The Delaware Court of Chancery had dismissed BitGo’s case with prejudice in June 2023, with Vice Chancellor J. Travis Laster stating that Galaxy had a “clean termination right” at the time. In response to the May 22 decision, a Galaxy spokesperson told Cointelegraph that the firm would “continue to vigorously defend ourselves" and expressed confidence in the merits of their case.

Galaxy, operated by Mike Novogratz, had announced its intention to acquire BitGo in May 2021 as part of its U.S. public offering. In November 2022, during the collapse of the cryptocurrency exchange FTX, Galaxy revealed approximately $77 million in exposure to the firm before FTX filed for bankruptcy.