Galaxy Ordered to Pay $200 Million for Alleged Market Manipulation
Michael Novogratz's Galaxy Digital is required to pay $200 million to New York State for alleged market manipulation related to the Luna token, associated with the failed Terra stablecoin.
Key points from the legal filing include:
- In 2020, Terra founder Do Kwon engaged Galaxy to purchase and promote Luna tokens.
- Galaxy acquired over 18.5 million LUNA at $0.22 per token, a 30% discount from the market price of $0.31.
- Galaxy endorsed Luna publicly while reportedly selling off its holdings without disclosure.
- Luna's price rose from $0.31 in October 2020 to $119.18 in April 2022.
- After receiving LUNA tranches, Galaxy sold portions at prices between $7.35 and $7.70 shortly after receipt.
Legal representatives claimed that Novogratz misled investors about Luna’s transaction capabilities on Chai. Galaxy did not respond to requests for comment.