Digital asset funds manager DigitalX (ASX: DCC) is seeking to raise $15.4 million from new and existing shareholders just days after the Bitcoin investor announced it had settled a long-running Federal Court dispute with co-founder and former CEO Alex Karis.
DigitalX has revealed that $10.3 million has already been raised via the private placement of 219.15 million shares, with $4.7 million of this total subscribed by newly appointed advisor Antanas Guoga who the company describes as “an experienced digital asset and blockchain enabler”.
The $5.09 million balance of the capital raising will be via a rights issue to existing shareholders at a price of 4.7c per share – the same as the private placement.
The Perth-based DigitalX says it has engaged Guoga, the chair of Canadian listed Solana Strategies Inc. who goes by the moniker Tony G, in an advisory role to help the company grow its existing digital asset staking and validation services as well as revenues and asset values.
Guoga’s investment in DigitalX is subject to a 12-month voluntary escrow period.
Subject to approval from shareholders, Guoga will also receive 25 million DigitalX options exercisable at 10c per share up to two years from the date of issue. This aligns with his advisory agreement which is for a period of two years.
The $15.4 million capital raising comes just two days after DigitalX announced that it had settled a dispute with Karis over the ownership of digital assets from the collapse of Japan’s Mt Gox Bitcoin Exchange in 2014.
Mt Gox, one of the largest crypto currency exchanges at the time, imploded following the loss of 744,408 Bitcoin due to an undetected hacking event that occurred three years earlier.
Karis, who resigned as CEO in 2016, officially made a claim on the assets via court action two years ago with the matter coming to a head in July as bankruptcy trustees to Mt Gox began forwarding payments to creditors from the collapse.
DigitalX, formerly known as Digital CC, secured a backdoor listing on the ASX in 2014 and had revealed in its prospectus that it had lost 351 Bitcoins from the collapse.
The company later discovered that Karis had lodged a claim with the Mt Gox bankruptcy trustee for these Bitcoin in his own name. DigitalX argued that this is despite Karis entering into an agreement to transfer the trading accounts of those Bitcoin to the company.
Karis launched legal proceedings in 2022 in the District Court of Massachusetts to secure the rights to recovery of Bitcoin from the Mt Gox trustee.
He later filed proceedings in the Federal Court of Australia seeking $1.168 million that he argued was not paid as part of his severance from the company in 2016.
Both matters were ultimately brought under Federal Court of Australia’s jurisdiction to be heard.
DigitalX announced earlier this week that as part of the settlement it will receive 40 Bitcoin, 52.48 Bitcoin Cash and 18.15 million Japanese yen ($187,000).
Combined with the capital raising, DigitalX will have more than $18 million in cash, $58 million in digital assets on its balance sheet and the prospect of receiving about 41 Bitcoin, currently valued at $7 million, in calendar 2025 from the administrators of the Mt Gox Exchange.
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