Galaxy Digital, a crypto investment firm founded by Michael Novogratz, has agreed to a $200 million settlement with the New York Attorney General's office. This case involves the firm's promotion and sale of LUNA tokens without full disclosure of its selling intent.
Case Details
According to the NYAG, Galaxy Digital acquired LUNA tokens in 2020, promoted them, and sold most of its holdings by March 2022, earning at least $100 million. By May 2022, when LUNA collapsed, Galaxy had already exited almost its entire position.
Context and NYAG Statement
The New York Attorney General's statement claims Galaxy violated the Martin Act and New York Executive Law by not disclosing its intent to sell the tokens. Michael Novogratz was a vocal supporter of LUNA, admitting that Galaxy 'helped kickstart' interest in the token through its marketing efforts.
Settlement Terms
Under the settlement terms, Galaxy will pay $200 million over three years, starting with $40 million in two weeks. The firm also agreed to implement policies to prevent conflicts of interest, including legal analysis of token investments and promotional statements.
Galaxy Digital has agreed to the settlement without admitting wrongdoings but promises to adhere to new regulatory standards aimed at preventing similar conflicts in the future.
