Galaxy Digital Ordered To Pay $200 Million In Luna Crypto Settlement

Ronaldo Marquez

2 months ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Galaxy Digital Holdings, led by CEO Michael Novogratz, has agreed to pay $200 million in penalties as part of a settlement with the New York Attorney General (NYAG), according to Bloomberg.

This settlement addresses civil claims related to the investment firm’s promotion of the now-infamous Luna cryptocurrency, which collapsed dramatically in mid-2022, resulting in massive financial losses across the crypto market.

Galaxy Digital $200 Million Settlement

The settlement, announced on Thursday, resolves allegations that Galaxy Digital violated regulations by promoting Luna without adequately disclosing its intent to sell the asset.

Between late 2020 and 2022, Galaxy had actively marketed Luna and its sister token, TerraUSD, which were intended to maintain value through algorithmic trading. Both tokens ultimately plummeted to near-zero value, erasing over $40 billion in market capitalization.

As part of the agreement, Galaxy Digital will pay the undiscounted penalty in installments until 2028. To prepare for this financial obligation, the company recorded a legal provision of $166 million in its full-year results, reflecting the impact of discounting on the penalty.

In a statement to Bloomberg, Novogratz acknowledged the gravity of the situation, stating, “This was not an easy decision and one that we considered carefully.”

The company’s CEO further pointed to the deception from Do Kwon and Terraform Labs, the creators of Luna, which misled many institutional investors. Novogratz emphasized that Galaxy has cooperated fully with regulators throughout the investigation.

Notably, Novogratz had previously made headlines for promising to get a tattoo of Luna if the token reached $100—a claim that underscored his confidence in the asset before its catastrophic decline.

In early 2022, he even shared a photo of the tattoo, which features a wolf howling at the moon alongside the word “Luna.” The New York attorney general’s office highlighted that Galaxy profited from Luna’s price surge, selling nearly all its holdings before the crash.

Luna’s Impact On The Cryptocurrency Market

As highlighted by Bloomberg, the collapse of Luna not only devastated its investors but also triggered a domino effect of failures and scandals throughout the cryptocurrency industry, leading to numerous bankruptcies and exposing fraudulent activities.

This settlement comes amid a broader context of shifting regulatory approaches within the US crypto landscape. Recently, the SEC has dropped enforcement actions against other notable crypto firms, including Kraken and Consensys, signaling a possible reevaluation of the regulatory framework surrounding digital assets.

Despite the challenges posed by the settlement, Galaxy Digital reported a net income of $174.5 million for the fourth quarter, down from $301.5 million in the same period the previous year

At the time of writing, Luna, now rebranded to Luna Classic (LUNC), trades at $0.00005919, reflecting a notable 12% drop in the monthly time frame and over 60% year-to-date.

Featured image from DALL-E, chart from TradingView.com

Ronaldo Marquez

Ronaldo is an experienced crypto enthusiast dedicated to the nascent and ever-evolving industry. With over five years of extensive research and unwavering dedication, he has cultivated a profound interest in the world of cryptocurrencies.

Ronaldo's journey began with a spark of curiosity, which soon transformed into a deep passion for understanding the intricacies of this groundbreaking technology.

Driven by an insatiable thirst for knowledge, Ronaldo has delved into the depths of the crypto space, exploring its various facets, from blockchain fundamentals to market trends and investment strategies. His tireless exploration and commitment to staying up-to-date with the latest developments have granted him a unique perspective on the industry.

One of Ronaldo's defining areas of expertise lies in technical analysis. He firmly believes that studying charts and deciphering price movements provides valuable insights into the market. Ronaldo recognizes that patterns exist within the chaos of crypto charts, and by utilizing technical analysis tools and indicators, he can unlock hidden opportunities and make informed investment decisions. His dedication to mastering this analytical approach has allowed him to navigate the volatile crypto market with confidence and precision.

Ronaldo's commitment to his craft goes beyond personal gain. He is passionate about sharing his knowledge and insights with others, empowering them to make well-informed decisions in the crypto space. Ronaldo's writing is a testament to his dedication, providing readers with meaningful analysis and up-to-date news. He strives to offer a comprehensive understanding of the crypto industry, helping readers navigate its complexities and seize opportunities.

Outside of the crypto realm, Ronaldo enjoys indulging in other passions. As an avid sports fan, he finds joy in watching exhilarating sporting events, witnessing the triumphs and challenges of athletes pushing their limits. Furthermore, His passion for languages extends beyond mere communication; he aspires to master German, French, Italian, and Portuguese, in addition to his native Spanish. Recognizing the value of linguistic proficiency, Ronaldo aims to enhance his work prospects, personal relationships, and overall growth.

However, Ronaldo's aspirations extend far beyond language acquisition. He believes that the future of the crypto industry holds immense potential as a groundbreaking force in history. With unwavering conviction, he envisions a world where cryptocurrencies unlock financial freedom for all and become catalysts for societal development and growth. Ronaldo is determined to prepare himself for this transformative era, ensuring he is well-equipped to navigate the crypto landscape.

Ronaldo also recognizes the importance of maintaining a healthy body and mind, regularly hitting the gym to stay physically fit. He immerses himself in books and podcasts that inspire him to become the best version of himself, constantly seeking new ways to expand his horizons and knowledge.

With a genuine desire to become the best version of himself, Ronaldo is committed to continuous improvement. He sets personal goals, embraces challenges, and seeks opportunities for growth and self-reflection. Ultimately, combining his passion for cryptocurrencies, dedication to learning, and commitment to personal development, Ronaldo aims to go hand-in-hand with the exciting new era that the emerging crypto technology is bringing to the world and societies.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.