Galaxy Digital in trouble? Mike Novogratz-founded digital asset co cutting jobs as steep losses mount
15:49, 2 November 2022
Galaxy Digital, the global crypto-focused financial services firm founded by Mike Novogratz, is planning to reduce the size of its staff by a fifth.
The current crypto bear market has put additional pressure on Galaxy Digita, where Novogratz is CEO.
A spokesperson from the company, responding to reports of a 20% cut in the workforce, told CoinDesk: “While our industry continues to face macroeconomic headwinds, Galaxy remains focused on building for the future state of institutional adoption and on enhancing long-term shareholder value. We are always considering optimal team structure and strategy and will share future plans when finalized.”
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$554.7m Q2 loss
In August 2022, the company announced it had suffered a $554.7m net loss during Q2, three times the $182.9m loss experienced in the second quarter of 2021.
During this time Novogratz remained positive and said: “I am proud of Galaxy's outperformance during a challenging market and macroeconomic environment. Prudent risk management, along with our commitment to exacting credit standards, allowed us to maintain over $1.5bn in liquidity, including over $1bn in cash.
"We remain in strong position to weather prolonged volatility, and to take advantage of strategic opportunities to grow Galaxy in a sustainable manner."
The hole in the accounts was primarily attributed to unrealised losses on digital assets and investments in its trading and principal investments division. Galaxy Digital said that record mining revenue helped offset some of its losses.
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Termination of acquisition
A week after the Q2 results, Galaxy Digital announced it had terminated its acquisition of BitGo, a crypto custody provider.
Galaxy said it dropped the purchase because BitGo failed to provide an audited financial report for 2021, as required by the agreement between the two companies.
BitGo responded by launching a lawsuit against Galaxy Digital, saying Novogratz’s company had breached merger agreements.
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