BitGo, the digital asset custodian, may pursue legal actions against Galaxy Digital for terminating the $1.2B merger deal. The company is seeking damages because the agreement was scheduled to expire at the end of the year. More: - Last year, Galaxy Digital proposed to acquire BitGo for $1.2B. The proposal included Galaxy Digital issuing 33.8 million new shares and a $265 million cash component, making it the biggest M&A deal in the crypto industry.
- The deal would have positioned Galaxy Digital to broaden its services to institutional investors, such as prime lending, investment banking, and tax services.
- On Monday morning, Galaxy Digital announced that it would pull out of the $1.2B acquisition of BitGo, saying that the company did not submit financial documents by the July 31 deadline.
- The announcement follows Galaxy Digital reporting $554.7M in second-quarter losses, up from a loss of $183M a year ago. Novogratz also confirmed that Galaxy Digital had about $1B in cash.on hand.
- R. Brian Timmons, partner at Quinn Emanuel, released a statement saying that blaming BitGo for the termination of the deal is "absurd" and that "BitGo has honored its obligations thus far, including the delivery of its audited financials. It is public knowledge that Galaxy reported a $550M loss this past quarter, that its stock is performing poorly."
- BitGo plans to take appropriate legal action against Galaxy Digital for terminating the acquisition.
- "Either Galaxy owes BitGo a $100 million termination fee as promised, or it has been acting in bad faith and faces damages of that much or more," read the company's statement.
- Galaxy responded, saying BitGo's claims "are without merit" and reaffirmed that the reason the deal is terminated is due to not receiving financial statements that were needed by Galaxy to submit to the SEC promptly.
- BitGo says that the expiry date was Dec. 31 and that Galaxy Digital failed to pay the $100M reverse break to end the merger.
- It is unclear if the recent crypto winter was a factor in the terminated deal. Galaxy had planned to pay $1.2B in stock and cash. BitGo says it had more than $64B in assets in custody at the end of 2021 as "client growth continues into 2022."
Decrypt 
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Tencent, a Chinese tech giant, will stop selling NFTs due to regulatory scrutiny. The company's Huanhe NFT platform, which was launched last August, will no longer sell NFTs starting Tuesday. More: - Customers that currently own NFTs will be able to hold, display, or request a refund.
- China banned all crypto activity, including trading and mining, last year.
- At the time, it was unclear if NFTs also fall under this regulatory ban; however, this week, the company was forced to halt the sale of NFTs on its platform.
- The company issued a statement saying, "Based on the company's consideration to focus on its core strategy, Huanhe is making adjustments to its business."
- Tencent's business offerings include Weixin/WeChat messaging app and mobile news, games, and payment systems.
Coin Desk
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Bankrupt Celsius reported owing a total of $6.7B in token liabilities against $3.8B in assets in its bankruptcy filings. The Texas Securities Board also ordered Celsius to stop selling its mined Bitcoin. More: - As bankruptcy proceedings continue, On Aug.14, Celsius revealed its budget plan for the next three months, which includes:
- Net cash flow will reach negative $137.2M by the end of October
- Celsius owes a total of $6.7B in token liabilities
- The company holds $3.8B in token assets, including $761M of its native CEL token.
- Token asset deficit amounts to $2.84B
- Operating expenses will reach $85.4M by the end of October
- $13.9M will go toward paying its employees
- $57.3M will go toward paying mining operations
- Restructuring expenses will cost $33.5M, and the company expects liquidity to fall to negative $33.9M
- The Texas State Securities Board wants Celsius to stop selling mined Bitcoin because the company has not proved how this will benefit creditors.
Blockworks
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Skybridge Capital believes that Bitcoin could reach $300,000 in the next six years. The firm is optimistic about the prospect of both Bitcoin and Ethereum over the next 12 to 24 months. More: - Anthony Scaramucci, founder of Skybridge Capital, expects a strong recovery period for the crypto industry.
- "It is a reminder to investors not to pull out, fight their fear, stay patient, and stay long-term," he says.
- Skybridge's biggest crypto investment is Bitcoin and Ethereum, but it is also bullish about Solana and has "a very large position" on Algorand.
- The improvements to the Lightning Network will also lead to more commercial activities in the future.
- Scaramucci predicts that Bitcoin will rise to $300,000 and stressed one point:
- "In the next six years, if we are right, if Bitcoin goes to $300,000 a coin, it will not matter whether you bought it at $20,000 or $60,000. It's really not going to matter."
- He also referenced BlackRock's commitment to launching a Bitcoin private trust and cited that there is "significant demand" from institutional investors, and said:
- "When this stuff happens, I want to remind people that there's only 21 million bitcoins out there, and you will have a demand shock with very little supply."
Bitcoin.com
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Bitfarms, a Quebec-based bitcoin miner, reported a $142M loss in the second quarter. The company sold some of its Bitcoin holdings to pay off a loan to Galaxy Digital. More: - The company sold $69.3M worth of Bitcoin to pay off the outstanding loan to Mike Novogratz's Galaxy Digital. Bitfarms owned $62M worth of Bitcoin by June.
- Bitfarm's revenue increased to $42M this year compared to $37M last year. The boost in revenue was due to increasing the hash rate.
- However, the crypto market crash decreased Bitcoin's price, which offset the company's overall revenue.
- Geoff Morphy says: "Delivering strong operational growth, we increased our corporate hash rate by 33% from the beginning of the quarter and by 157% from a year ago to 3.6 exahash per second (EH/s) on June 30, 2022."
- Hash rate is the computational power per second used when mining; it relates to the speed of mining and a method that miners use to measure potential earnings.
- SInce mining involves solving cryptographic puzzles; think of each hash as a "guess" at the cryptographic string.
- The miner that guesses correctly wins a verified block on the blockchain and adds a block to the blockchain.
- The company also acquired 9,000 new mining rigs. However, the rising cost of energy and the drop in the price of Bitcoin led to losses in the second quarter.
Decrypt
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The Federal Reserve has issued guidelines for financial institutions seeking to offer crypto services. A tiered framework was developed to measure risk associated with novel financial offerings; the word "cryptocurrency" was mentioned once. More: - The Federal Reserve revealed formal guidelines for institutions offering "new types of financial products" with master accounts.
- In June, Custodia sued the Federal Reserve for a nine-month delay in processing the bank's application for a master account.
- All federally chartered banks possess master accounts. These accounts will allow for direct payments with access to the Fed.
- The word "cryptocurrency" was used once among institutions seeking master accounts; however, many experts believe that the new guideline is linked to the crypto sector.
- The delay in processing applications is due to the regulatory uncertainty over how to grant traditional banking power to crypto firms like Kraken and Custodia.
- The new guidelines are set up in a tiered framework that measures risk:
- Tier 1 consists of applicants that are insured federally.
- Tier 2 includes institutions not federally insured but "subject to federal prudential supervision," which is weaker than the former.
- Tier 3 includes institutions that are neither federally insured nor subject to prudential supervision. Kraken and Custodia will fall into Tier 3.
- The Feds have cautioned not to read too much into these guidelines and use them to assess risk because legal eligibility standards have not been established yet.
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 |  | Gia Mattu is based in Calgary, Alberta. She is an entrepreneur with experience in climate technology, drones, AI, machine learning, and blockchain technology. When she's not working, she loves to hike the Canadian Rockies, try new cuisine, and travel. | | | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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