Crypto Three Things (8/16)
Aug 16, 2022
“Cynics are simply thwarted romantics.”― William Goldman
1) Galaxy Digital drops BitGo deal: Mike Novogratz's crypto investment firm, Galaxy Digital, pulled the plug on a $1.2B merger with digital asset custodian BitGo. BitGo hit back, declaring the termination was "absurd," and hired a law firm, Quinn Emanuel, to pursue a $100M reverse break fee.
Titan's Takeaway: While Galaxy cites a breach of contract by BitGo in its suit, we question whether the recent market turmoil had anything to do with the investment firm's sudden annulment. A $550M second-quarter loss could have spooked Galaxy from partaking in crypto's first $1 billion deal.
2) Dragonfly buys Metastable in rebranding move: Digital-asset VC firm Dragonfly, boasting $3B in assets across three funds, unveiled its new acquisition – Metastable Capital. Founded in 2014, Dragonfly is one of the oldest hedge funds in the crypto space. Since its launch, the firm has invested in Ethereum, Avalanche, Zcash, and others.
Titan's Takeaway: The rebrand highlights the emerging theme of consolidation prevailing over cryptocurrency firms during times when preserving capital is essential for staying afloat.
3) Terra founder says Korean authorities 'haven't reached out': Do Kwon, the South Korean cryptocurrency developer behind the failed Terra stablecoin that crashed three months ago, said South Korean investigators haven't filed charges or tried to contact him. Authorities banned Terraform employees from leaving Korea and required that Kwon notify them if and when he decides to move back from Singapore to his home country.
Titan's Takeaway: Terra's breakdown incinerated $40B in a matter of days and set off a contagion that toppled high-flying industry players. The question is whether Terra's blowup constitutes fraud and who will be held responsible for the damages.
Cash Management
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