BitGo faces securities lawsuit over $75.5M in losses after IPO

BitGo Holdings Inc. was sued in a federal securities class action alleging the digital asset custodian misled investors about the risks declining crypto prices posed to its business ahead of its January initial public offering.

"The complaint alleges that defendants understated the scope and severity of the risk that declining digital asset prices posed to the company's business and financial performance," Josh Wilson, securities litigation partner at Faruqi & Faruqi, said in a statement.

The lawsuit covers investors who purchased BitGo Class A common stock in or traceable to the Jan. 22 IPO and those who bought securities between Jan. 22 and May 13. The lead plaintiff deadline is Aug. 7. BitGo listed on the New York Stock Exchange under the ticker BTGO.

BitGo reported a $14.8 million net loss for the full year 2025 on March 26, swinging from $156.6 million in net income the prior year, and disclosed deteriorating margins in its Digital Asset Sales segment. The company then posted a $60.7 million net loss for the first quarter of 2026 on May 13, sending shares sharply lower. The cumulative losses erased roughly $75.5 million in shareholder value from the IPO price, according to the complaint.

The lawsuit, filed by the DJS Law Group on July 7, joins similar actions from Faruqi & Faruqi and the Rosen Law Firm, all of which name the company and certain executives as defendants. The complaints allege the IPO's registration statement and prospectus contained materially false or misleading statements and omitted required information about the company's exposure to digital asset price declines.

BitGo, founded in 2013, is one of the largest independent custodians of digital assets, serving institutional clients including hedge funds and exchange-traded product issuers. The company went public at an undisclosed valuation in January, capitalizing on a rebound in crypto markets after Bitcoin's 2022 downturn.

The outcome of the lead plaintiff selection process will determine which law firm directs the litigation. Investors who suffered losses may be eligible to recover damages without paying out-of-pocket fees under contingency fee arrangements offered by the plaintiff firms. The court has not yet certified a class or appointed a lead plaintiff.

This article is for informational purposes only and does not constitute investment advice.