The Intersection: Crypto And Wall Street This Week - Saturday, May 8

Blockchain, Technology, Smart, Bitcoin, Money

As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.

GALAXY DIGITAL TO ACQUIRE BITGO

Galaxy Digital Holdings announced Wednesday that it has agreed to acquire BitGo, an independent digital assets infrastructure provider. The company said, “The acquisition will position Galaxy Digital as a leading global full-service platform for institutions seeking access to the crypto economy, offering an unparalleled breadth of industry-leading products and services at scale.” BitGo is a custody provider with over $40B of assets under custody, serving over 150 exchanges and over 400 institutional clients. BitGo processes over 30B monthly transactions, supports the custody of more than 400 coins and tokens and provides clients with the most comprehensive insurance available in the market.

Under the terms of the merger agreement, the consideration to BitGo shareholders will consist of 33.8M of newly issued shares of Galaxy Digital common stock and $265M in cash, subject to certain adjustments and deferred purchase considerations, implying an aggregate transaction value of approximately $1.2B based on Galaxy Digital's closing share price on May 4, 2021. Galaxy Digital will use its balance sheet to fund the cash consideration, a significant portion of which will be deferred up to 12 months post-close. Additionally, Galaxy Digital will issue incremental shares of its common stock to BitGo's shareholders in exchange for BitGo's net digital assets at close. BitGo shareholders will own approximately 10% of the pro forma company. Galaxy Digital to retain substantially all current BitGo employees and enter into employment agreements with key members of the management team. Upon closing Mike Belshe will join as Deputy CEO of Galaxy Digital and will become a member of the company's Board of Directors. The transaction has been approved by the boards of directors of both Galaxy Digital and BitGo. The acquisition is expected to close in the fourth quarter of 2021.

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