- The media has learned that the lawsuit against Galaxy Digital and CEO Michael Novogratz may be reclassified as a class action.
- Sources say this will cause delays that will cause the firm to have to postpone its listing on the U.S. exchange.
Galaxy Digital is facing delays as it tries to list on the U.S. Nasdaq exchange, Forbes reported, citing its sources. The company will have to shelve its plans if the lawsuit against it is reclassified as a class action, the publication noted.
In comments to Forbes, company spokesman Michael Wurstorn said the following:
“We firmly believe these allegations are baseless, and we intend to defend that position.”
Before this, Galaxy Digital did not mention the lawsuit in the SEC filing papers, according to the publication. The company filed in 2022.
Partner Vincent de l’Etoile of Canadian law firm Langlois Lawyers said Galaxy Digital must notify the agency:
“In the U.S., it [the firm] may be required to file an additional certification simply because the amount of the claim is significant to the business.”
The lawsuit against Galaxy Digital was filed by one of Terraform Labs’ affected investors, Richard Banach, in December 2022. He accused CEO Michael Novogratz of fraud and demanded $2 billion in compensation.
Galaxy Digital had planned to list on the Nasdaq as early as 2022, but delayed the listing because of a legal battle with custodial service BitGo.
The company withdrew the deal because of a partner’s failure to fulfill reporting obligations. Castodian sued for $100 million but lost.