Galaxy Digital Agrees to $200 Million Settlement with New York Attorney General
Galaxy Digital Holdings Ltd (TSE: GLXY) has settled with the New York Attorney General's Office for $200 million over allegations of promoting the LUNA token without disclosing its holdings. This settlement arose from accusations that Galaxy profited by selling millions of tokens while misleading investors about the asset’s potential.
Key points include:
- The settlement signed on March 24 mandates a $200 million payment plan over three years, starting with a $40 million installment due in two weeks.
- Galaxy must implement policies to prevent conflicts of interest, including stricter promotional guidelines and legal reviews for future token transactions.
- The LUNA crash in May 2022 led to significant losses, with UST losing its dollar peg and LUNA plummeting from $119.5 to nearly worthless, erasing over $40 billion in market value.
- Galaxy's CEO Michael Novogratz was a prominent supporter of LUNA, despite the firm secretly dumping tokens.
- Galaxy had acquired 18.5 million LUNA tokens at a discounted price and sold most before the crash, generating over $100 million in profits.
Galaxy has neither admitted nor denied the allegations. This case is part of a wider crackdown on misconduct related to LUNA; the SEC previously settled with Jump Crypto for $123 million over similar issues.