Galaxy Digital’s $200M Crypto Fiasco: A Wolf in Moonlight Clothing

Story Highlights

• Galaxy Digital settles LUNA case with a $200M agreement. 💸

• Novogratz promoted LUNA while secretly selling millions. 🐺🌕

• New York AG accused Galaxy of misleading investors. 🕵️‍♂️

Galaxy Digital has agreed to pay a $200 million settlement to the New York Attorney General’s Office. The case involves the company promoting the cryptocurrency LUNA while secretly selling its holdings. The company generated significant profits while keeping information about its sales from public knowledge. Quite the sleight of hand, wouldn’t you say? 🎩✨

Galaxy Digital Faces Legal Action Over Undisclosed LUNA Sales

LUNA operated as a cryptocurrency that represented TerraUSD (UST) stablecoin through a stable mechanism. The UST stablecoin emerged from Terraform Labs under a mechanism that used LUNA to maintain its value stability. The crypto market boom of 2021 brought quick price growth to LUNA. The crypto supporters who gave themselves the nickname “lunatics” maintained complete confidence in LUNA’s success. Because, of course, nothing says “sound investment” like calling yourself a lunatic. 🌕🤪

As CEO of Galaxy Digital, Michael Novogratz actively supported LUNA by promoting it to his clients. During his support for LUNA, he vowed to get a tattoo when LUNA surpassed a price of $100. After this achievement, he showcased his new tattoo through social media which featured a wolf under moonlight. Because nothing says “trustworthy” like a wolf howling at the moon. 🐺🌕

During LUNA promotion activities, Novogratz was engaged in, Galaxy Digital conducted secret transactions which involved selling millions of tokens. The investors remained unaware of these sales until the issue came to light as a major problem. During the investigation, the New York Attorney General declared that the company had deceived its investors. Shocking, I know. 🕵️‍♂️

The settlement revealed that Galaxy Digital simultaneously promoted LUNA tokens while conducting substantial token sales. The company participated in LUNA price growth alongside securing major financial earnings from the operation. Sales conducted by this entity remained undisclosed to the general public. The Attorney General initiated legal proceedings because of the insufficient disclosure measures adopted by the company. Transparency? Never heard of her. 🤷‍♂️

The investigation alleges that Terraform Labs pursued investment from a prominent U.S. institutional investor to push LUNA forward. The deal between Galaxy Digital purchased 18.5 million tokens through a discounted offer of 30%. The company gradually sold an extensive portion of the issued tokens, although the LUNA promotion continued during this period. A classic case of “do as I say, not as I do.” 🎭

The profits for Galaxy exceeded $100 million by March 2022. The crypto market crash happened as the company had sold off most of its crypto investments. The company escaped substantial financial losses that ordinary investors suffered from due to its investments. Lucky them, unlucky you. 🍀

Galaxy Digital Agrees to New Rules Without Admitting Liability

To settle the case, the company will issue payment of $200 million in three annual installments. The provider of the $40 million payment must submit it within two weeks. As part of the agreement, the company accepted two conditions in addition to the monetary sum. Galaxy Digital has established three regulations that entail introducing measures to prevent conflicts of interest, as well as having experts check token deals while establishing clear promotional transparency. Because nothing says “we’ve learned our lesson” like a few new rules. 📜

Galaxy Digital settled the case by agreeing to these terms despite never making an admission of liability. This settlement emerges from the regulators’ broader attempt to regulate the crypto industry. Recently, the SEC (U.S. Securities and Exchange Commission) settled with Ripple for a $50 million fine. The crypto world is getting a bit too hot to handle. 🔥

The crypto market now undergoes increasing legal inspection from authorities. The authorities have intensified their efforts to combat fraud and build transparent systems. The Galaxy Digital case is another example of regulatory enforcement of corporate responsibility. Because, let’s face it, someone has to keep these wolves in check. 🐺

Galaxy Digital will publicly disclose its complete annual financial report soon. As new regulations evolve in the crypto industry, investors closely observe its influence on the digital asset market structure. Stay tuned, folks. The drama is far from over. 🎬

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2025-03-28 17:25