Why Is Exodus Taking W3C to Court?
Crypto wallet provider Exodus Movement has filed a lawsuit in Delaware’s Court of Chancery against payments infrastructure firm W3C Corp and its chief executive, Garth Howat, accusing them of breaching a $175 million stock purchase agreement and attempting to derail the transaction.
The complaint seeks specific performance, asking the court to compel W3C and Howat to complete the sale. Exodus also requested injunctive relief to prevent what it described as ongoing interference with the businesses included in the deal while litigation is ongoing.
The dispute stems from a November 24, 2025 agreement under which Exodus agreed to acquire all outstanding shares of W3C. The transaction was structured to combine Exodus’ self-custodial crypto wallet with W3C’s payments infrastructure, including operations under the Monavate and Baanx brands, bridging blockchain-based services with traditional card payments.
What Are the Core Allegations Against W3C and Howat?
Exodus alleges that after it secured key regulatory approvals, including clearance from the UK Financial Conduct Authority on April 8, 2026, W3C and Howat refused to proceed with closing and instead took steps that disrupted core business operations.
The complaint focuses heavily on actions tied to Monavate, described as W3C’s main operating subsidiary. Exodus claims Howat attempted to take direct control of the entity by filing unauthorized and backdated changes with the UK’s Companies House to alter its board structure.
It further alleges that authentication credentials were changed, locking out existing management, and that senior executives were removed and replaced shortly after regulatory approval was secured. These actions, according to Exodus, violated contractual obligations requiring the business to operate in the ordinary course between signing and closing.
Exodus also claims Howat directed attempted transfers of $1 million and $2 million from Monavate accounts to a Baanx US entity. The transfers were not executed, and the matter was reported to regulators, according to the complaint.
Investor Takeaway
What Pre-Closing Conditions Became Points of Conflict?
The agreement required both parties to complete several pre-closing steps, including regulatory approvals, contract novations, and the transfer of key assets and intellectual property. Exodus claims it fulfilled its obligations and remained ready to close, while W3C failed to complete critical requirements.
One major issue involved change-of-control approval from the Bank of Latvia tied to TigSiPay, a financial services firm connected to W3C. Exodus alleges that final documentation was prepared and sent for signature in early 2026, but Howat failed to execute the documents despite evidence that he had received them.
The complaint also states that W3C did not novate essential contracts with partners including Ledger, 1inch, MetaMask, Visa, Mastercard, Coinme and AWS. These agreements were central to the transaction because some were held by entities outside the direct acquisition structure.
Exodus further alleges that W3C withheld key assets, including source code and blockchain-related rights, and did not provide complete financial disclosures related to customer funds and operational accounts.
Investor Takeaway
What Are the Broader Implications for Crypto and Payments M&A?
W3C’s portfolio includes Monavate, a UK-regulated electronic money institution, and Baanx entities providing card-linked crypto payment services, placing the deal under multiple regulatory regimes.
Exodus alleges that Howat attempted to repudiate the agreement entirely, calling it unenforceable and pushing for renegotiation while exploring alternative financing or sale options. The complaint argues that such actions violate exclusivity provisions and limited termination rights set out in the contract.
The lawsuit also seeks to recover legal costs through a $20 million indemnity escrow tied to the transaction, adding a financial dimension to the dispute beyond the deal value itself.
