Ben Strack

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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After a process that took years (1,300 or so days, Galaxy CEO Mike Novogratz noted on a Tuesday earnings call), GLXY shares are trading on the Nasdaq.&nbsp;



The US listing boosts the stock’s visibility — i.e. via Robinhood and perhaps, one day, in indexes (S&amp;P, MSCI, Russell, etc.) More than that, though, we’re watching how it helps the firm scale as competition stiffens in the growing crypto space.&nbsp;



“Most of Galaxy&#8217;s growth over the last seven years was internally funded with investing profits or trading profits, and so there was a regulator on how fast we could grow,” Novogratz explained. “Depending on the opportunities we see, being able to tap the deepest capital market in the world is a huge advantage.”



In other words, the CEO added on the call: “Bigger is better in financial services, and we plan to get a lot bigger.&#8221;



We’ve seen some huge crypto M&amp;A so far this year. To name a few: <a href="https://blockworks.co/news/coinbase-deribit-deal-focus-derivatives">Coinbase-Deribit</a> (a $2.9 billion deal); <a href="https://blockworks.co/news/crypto-ma-mergers-feeding-frenzy-kraken">Kraken-NinjaTrader</a> ($1.5 billion); and <a href="https://blockworks.co/news/crypto-tradfi-intersections-ripple-blackrock">Ripple-Hidden Road</a> ($1.25 billion).



Novogratz noted that having a more fairly-valued stock — after historically trading below its book value — allows Galaxy to more seriously look at acquisitions.&nbsp;



“There are some businesses that make sense to grow organically, and some that make sense to add on,” Novogratz said. “And so, I think you&#8217;re going to see a little of both in the coming 36 months.”&nbsp;



DeFi Technologies also listed on the Nasdaq this week.&nbsp;



That company, like Galaxy, has been trading publicly in Canada (and continues to).&nbsp;



But as DeFi Technologies CEO Olivier Roussy Newton put frankly: “Canada is a small population base compared to the United States. The world trades on the US capital markets.”



He also alluded to M&amp;A, telling me: “You [present] your equity for investors, and if you can do that effectively you trade at a high multiple and you raise more money and you buy more companies.”



DeFi Technologies looks to have 100 crypto investment product listings by the end of the year. The company bought ETP issuer Valour in 2021 before acquiring Reflexivity Research and crypto liquidity provider Stillman Digital last year.



As for future acquisition targets, Newton said: “There’re a lot of private trading technology companies in the digital asset space that would want to…access capital market equity financings and other derivatives mechanisms to enhance those opportunities.”



Scale and product breadth will be especially important for firms like Galaxy and DeFi Technologies as more financial giants wade deeper into crypto.&nbsp;



One area that TradFi players entering the space are focused on (or will be) <a href="https://blockworks.co/news/yield-bearing-settlement-network-tokenization">is tokenization</a>, Novogratz said.



“We are trying to build our moat through domain expertise, through better customer relationships, and through kind of staying one step ahead of those guys,” he noted on the earnings call.



All’s to say, we’ll be watching more than just the GLXY and DEFT stock prices.



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DeFi Technologies

Galaxy, DeFi Technologies look to leverage new Nasdaq listings

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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We have a more specific date on when Galaxy Digital intends to (finally) go public in the US. And speaking of crypto-related equities, Grayscale’s launched a new ETF.



First, on Galaxy: The firm is eyeing May 16 for its Nasdaq listing. We reported earlier this month that the SEC <a href="https://blockworks.co/news/galaxy-sec-listing-nasdaq-ipo-market-crypto">“declared effective”</a> the company’s registration statement to do so. There’s still that shareholder meeting to approve the move on May 9.



Galaxy shares have traded on the Toronto Stock Exchange since 2020 and will continue to do so “for a period of time” if and when the Nasdaq listing is finalized, the company says. The new listing will “enable us to attract a broader investor base,” CEO Mike Novogratz said in a statement.&nbsp;



It would seem he’s right given financial pros like to see cash flows, balance sheets, etc. — things bitcoin alone doesn’t offer. And as noted before we’re keeping an eye on the other segment players looking to <a href="https://blockworks.co/news/circle-ipo-stablecoin-competition-investors">soon go public</a> (looking at you, Circle and <a href="https://blockworks.co/news/crypto-ipo-boom-etoro-kraken">eToro</a>).



On to the Grayscale update, the firm has launched an ETF that invests in companies adopting bitcoin as a treasury asset. Galaxy’s TSX-listed shares are actually the fund’s seventh-largest holding out of the gate. Its top two holdings are Strategy and Tesla, with ~27% and ~17% positions, respectively.&nbsp;



Bitwise launched a similar product in March. That one, too, skews heavily toward MSTR (also at nearly 27%) but opts for Marathon Digital and Riot Platforms as its next-biggest holdings (~11% and ~9%). Less than 2% of the fund’s assets currently go toward Tesla. 



That Bitwise offering has just $5 million in AUM after nearly two months on the market; still, these funds’ investable universes are <a href="https://blockworks.co/news/corporate-bitcoin-adoption-boom-inevitable-kraken">expected to grow quickly</a>. We’ll see what kind of impact that has on the demand for them.



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ETFs

Another crypto equity ETF launches ahead of Galaxy’s US public listing

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Galaxy&#8217;s possible US listing in the coming weeks would end a years-long process and keep up the momentum around more crypto firms going public.



The SEC has “declared effective” the company’s registration statement to list on the Nasdaq Global Select Market, Galaxy said yesterday.&nbsp;



The company’s shareholders are set to vote on Galaxy’s reorganization (becoming a new Delaware holding company) on May 9. Galaxy CEO Mike Novogratz said in a statement that, if approved, the listing could be completed by the end of Q2.



Galaxy, listed in Canada since 2018, has <a href="https://blockworks.co/news/galaxy-public-sec-earnings">tried to gain a US listing </a>for years. The company will keep trading on the Toronto Stock Exchange, it said Monday.



Executives noted on Galaxy’s March 28 earnings call that they had recently submitted an amended S-4 responding to the SEC’s ninth round of comments. Geez Louise.



There’s little doubt this step forward is a result of Gary Gensler no longer leading the agency. The SEC has clearly <a href="https://blockworks.co/news/sec-actions-timeline">cut out its animosity</a> toward crypto segment players in recent months.&nbsp;&nbsp;



Shares of crypto wallet provider <a href="https://blockworks.co/news/exodus-uplists-to-nyse-american">Exodus became available</a> on the NYSE American stock exchange in December. That company also had its <a href="https://www.globenewswire.com/news-release/2024/05/09/2878404/0/en/Listing-of-Exodus-Class-A-Common-Stock-Delayed-by-NYSE-American.html">troubles</a> getting a green light from the previous SEC administration.



Other companies appear to see the new SEC as an opportunity to do the same, with <a href="https://blockworks.co/news/circle-ipo-stablecoin-competition-investors">Circle</a> and <a href="https://blockworks.co/news/crypto-ipo-boom-etoro-kraken">eToro</a> publicly filing for IPOs in recent weeks. 



And so, it appears there could soon be more avenues for investors to gain crypto exposure. As 10T Holdings founder Dan Tapiero said at DAS last month: “American investors love owning equity.”



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Forward Guidance newsletter

Galaxy’s imminent US listing reflects SEC change

Katherine Ross

Michael Novogratz’s Galaxy has been ordered to pay New York State $200 million after it was accused of market manipulation.



A legal filing from this morning accuses the firm of manipulating the price of luna, the token tied to the now-failed algorithmic stablecoin Terra.&nbsp;



“This was not an easy decision and one that we considered carefully. Settling this matter will help Galaxy move forward and minimize distractions so that we can focus on our mission of driving innovation and growth in digital assets and artificial intelligence infrastructure,” Galaxy’s Michael Novogratz said in a statement.&nbsp;



Back in 2020, the legal filing claims, Terra founder Do Kwon sought out Galaxy to help purchase and promote Luna tokens.&nbsp;



“Galaxy bought more than 18.5 million LUNA from Terraform in October 2020 at $0.22 per token, a nearly 30% discount to LUNA’s then-market price of $0.31 and began endorsing Luna,” the <a href="https://ag.ny.gov/sites/default/files/settlements-agreements/galaxy-digital-holding-ltd-et-al-assurance-of-discontinuance-2025.pdf">filing</a> said.&nbsp;



But, after Novogratz got his Luna tattoo once the price hit $100, Galaxy was quietly selling LUNA without disclosing the sales to the public.&nbsp;



“Galaxy helped a little-known token increase its market price from $0.31 in October 2020 to $119.18 in April 2022.”



The filing claims that Galaxy and Luna went back and forth before beginning their business relationship, given that Galaxy sought to understand any potential use cases for Luna.&nbsp;



“Galaxy met with Terraform’s co-founders, reviewed Terraform’s public materials — including its white papers and public posts, spoke to node operators to confirm blockchain activity, reviewed blockchain data on the Terra blockchain explorer, and conducted background checks on Terraform’s co-founders,” the document said.&nbsp;



The offer Terra put on the table was simple: a 30% discount to market price, with tokens vesting monthly over the next year. Galaxy received a total of 18 million tokens, with Terra handing over 1/12 of those each month during that timespan.&nbsp;



Galaxy’s “Vice President explained that this was better than prior deals Terraform had offered to other investors. It meant Galaxy would be able to sell its LUNA when it received them each month.”



The signed agreement has Galaxy investing $4 million in exchange for a 30% discount to the spot price of luna — which was around $0.31 at the time. In total, Galaxy purchased 18,513,120 LUNA at $0.22 per token.



Lawyers laid out in the filing that Novogratz was quick to start endorsing Luna, misleading investors into thinking that they could make Luna transactions on Chai, which wasn’t true. Through press, Novogratz continued to promote Luna and the price quickly began climbing.&nbsp;



But behind the scenes, Galaxy was selling off its luna.&nbsp;



“On March 2, 2021, Terraform issued the fourth tranche of 1,542,764 LUNA to Galaxy, and on March 3, Galaxy sold all 1,542,764 LUNA at prices between $7.35 and $7.70.”



The settlement announcement coincided with Galaxy’s earnings, which were announced Friday.&nbsp;



“We only recently became aware that the NY attorney general was going forward with this matter, which led to settlement discussions that culminated with the outcome today,” a Galaxy spokesperson explained to Blockworks.



Updated March 28, 2025 at 10:03 am ET: Added comment from Galaxy. 



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Galaxy

Galaxy to pay $200M to New York over alleged LUNA manipulation

<div id="highlights-block_624733b5db268" class="highlights">
 <ul>
 <li>The acquisition is set to close after Galaxy Digital becomes a Delaware-based company</li>
 <li>Galaxy reported that its first quarter net comprehensive income is expected to be a loss of between $110 million and $130 million</li>
 </ul>
 
</div>



Galaxy Digital’s expected fourth quarter acquisition of institutional crypto platform BitGo has been delayed, and the deal is now anticipated to close later this year.



The company <a href="https://cms.blockworks.co/galaxy-digital-acquires-bitgo-for-1-2b/" target="_blank" rel="noreferrer noopener">first revealed its intent</a> to acquire BitGo in May 2021 in a cash and stock transaction valued at roughly $1.2 billion.



The purchase is now projected to close after Galaxy Digital becomes a Delaware corporation, according to a statement Thursday. That’s expected to happen between the second and fourth quarter, subject to SEC review.



“That&#8217;s a pretty broad window, and I think we&#8217;re going to hope for the best, and we&#8217;re going to continue to engage with the SEC,” CEO Mike Novogratz said on an earnings call.



The company then intends to list publicly on the Nasdaq. A source familiar with the matter said the listing process — and SEC approval — has taken longer than expected. If Galaxy were to close the BitGo deal before incorporating in the US, the source added, the company would still have to get regulatory approval for the purchase.&nbsp;



That would mean going through an intensive process twice: once in Canada and once in the US. The federal securities regulator has seen delays in approvals under the Biden administration, which is applying a heavier regulatory touch than the Trump regime. Other new listings, including SPACs, have likewise been delayed.



The updated cash and equity deal — $265 million and 44.8 million newly issued shares — values BitGo just below $1.2 billion. Other adjustments include BitGo shareholders owning roughly 12% of the combined company, up from an initial 10%.



Though the equity infusion dilutes the value of prior shareholders, the additional equity means new BitGo hires will also get in on the deal — a key component for retention.



Galaxy will have to pay $100 million to BitGo “in certain circumstances” if the sale doesn’t go through by the end of the year.&nbsp;



The deal was renegotiated due in part to <a href="https://www.bitgo.com" target="_blank" rel="noreferrer noopener">BitGo’s growth</a>, Novogratz said, adding the soon-to-be acquired company hired roughly 150 people since the deal was first announced.



“We remain committed to integrating BitGo and becoming an institutional crypto platform, period,” Novogratz said. “It&#8217;s a bigger and better company, and we&#8217;ll continue to work on integration side-by-side until we close the deal.”



The acquisition of BitGo is a significant step toward allowing Galaxy Digital to provide a full set of prime broker-type services to institutional investors, including custody, lending, trade execution, pricing and administrative services, Andrew Young, an investment banking analyst at Architect Partners wrote in a research note.



“This is a big financial commitment for Galaxy but perfectly consistent with the strategy to become the go-to crypto asset investment platform of institutional investors,” Young wrote. “The full set of capabilities are soon to be table stakes and are a necessity for institutional adoption of crypto assets.”



Damien Vanderwilt, Galaxy’s co-president and head of global markets, said on the call with analysts that the prolonged close of the BitGo deal is due to a focus on delivering new products — such as BitGo coin support and downstream services.



Galaxy reported net comprehensive income of $521 million in the fourth quarter. The company noted its first quarter net comprehensive income is expected to be a loss of between $110 million and $130 million, saying the crypto industry’s market capitalization is down about 4% since the end of 2021.



“We are ready for a volatile year, if that&#8217;s what we get, given the headwinds in macro,” Novogratz said. “But we&#8217;re certainly excited about getting through the SEC process and getting BitGo integrated with us as fast as we can.”



Michael Bodley contributed reporting.



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BitGo

Awaiting US Listing, Galaxy Digital Delays Purchase of Crypto Platform BitGo

Casey Wagner

<div id="highlights-block_60b68b8785cb1" class="highlights">
 <ul>
 <li>Sports merchandise company Fanatics will be Candy’s majority shareholder</li>
 <li>Novogratz and Vaynerchuk will be equity partners and serve as co-chairs</li>
 </ul>
 
</div>



Nearly two years after the launch of the non-fungible token platform NBA Top Shot, a new group of entrepreneurs is looking to capitalize on the popular sports NFT market by launching a new company called Candy Digital.



Included in the deal are Fanatics executive chairman Michael Rubin, Galaxy Digital founder and CEO Mike Novogratz and digital media entrepreneur Gary Vaynerchuck. Major League Baseball will be Candy’s first partner, according to a <a href="https://www.fanaticsinc.com/press-releases/fanatics-galaxy-digital-and-entrepreneur-gary-vaynerchuk-back-candy-digital-a-next-generation-digital-collectible-company" target="_blank" rel="noreferrer noopener">statement</a> released by Fanatics Tuesday. 



Sports merchandise company Fanatics will be Candy’s majority shareholder. Novogratz and Vaynerchuk will be equity partners and serve as co-chairs. Vaynerchuk will be a board member and advisor.



Each member of the group brings unique experience to the table. Rubin is the mastermind behind the world’s largest licensed sports apparel retailer. Fanatics has a customer base of more than 80 million.&nbsp;



Vaynerchuk, an early entrant into the sports card market, is the founder of digital media company VaynerMedia and athlete management firm VaynerSports. Former hedge fund manager Novogratz is one of the most vocal and respected crypto advocates on Wall Street. 



“The NFT space has traditionally focused on a small community of crypto-first customers, Candy&#8217;s sophisticated team is building immersive brand experiences that appeal to crypto-savvy players, consumers, memorabilia collectors, and sports fans alike, and Galaxy looks forward to participating in the evolution in collectibles,&#8221; said Mike Novogratz, founder, and CEO of Galaxy Digital and co-chair of Candy Digital.



Candy is hoping to capitalize on the unprecedented interest in the sports NFT market right now. NFTs experienced a major surge earlier this year as investors flocked to assets like autographs and trading cards. Sports <a href="https://cms.blockworks.co/the-investors-guide-to-nfts/" target="_blank" rel="noreferrer noopener">NFTs</a> have dominated headlines and raked in millions in revenue over the past six months. 



Major League Baseball is following in the NFT footsteps of the National Hockey League and National Basketball Association with its Candy partnership.



“From trading cards to autographed balls, baseball fans have demonstrated their passion for the sport and its players through collectibles for decades,” said Robert D. Manfred, Jr., Commissioner of Baseball, in a statement. “In working with Candy Digital to offer NFTs to MLB fans, we’re delivering an exciting new addition to the robust baseball collectible market. The founders of Candy are a dynamic group of executives with an impressive track record. We’re excited to be the first partner in this new venture with a team uniquely positioned for success.”&nbsp;



Candy’s first collectible will be a Lou Gehrig NFT of the baseball player’s July 4, 1939 farewell speech to be released on July 4. Candy will be the hub for purchasing, trading and sharing all officially licensed baseball NFTs going forward.