PANews reported on March 28 that according to Axios, the New York Attorney General's Office (NY AG) has reached a $200 million settlement agreement with Galaxy Digital regarding the manipulation of LUNA tokens. The agreement accuses Galaxy Digital and its related companies of violating the Martin Act and the Enforcement Act when promoting LUNA and failing to disclose their interests in LUNA.
Background review: The collapse of LUNA and Terra USD (UST) stablecoins in 2022 caused the evaporation of more than $40 billion in wealth. Galaxy Digital founder and CEO Michael Novogratz was once a major supporter of LUNA, and posted a photo of a "Wolf Howling Moon" tattoo on social media when LUNA broke through $100. However, according to the settlement documents, Galaxy Digital sold a large number of tokens during the LUNA price surge, making a profit of more than $100 million without disclosing it to the public.
Settlement details:
• Galaxy Digital acquired 18.5 million LUNA tokens at a 70% discount to the then spot price and sold most of the tokens in batches within a year.
• As of March 2022, before the market crash, Galaxy had liquidated almost all of its LUNA holdings, making huge profits of hundreds of millions of dollars.
• The agreement stipulates that Galaxy Digital will pay a $200 million fine within three years, with the first $40 million to be paid within two weeks.
• Galaxy agreed to adopt policies to prevent conflicts of interest, including legal analysis of all token transactions and increased employee investment oversight.
It is worth noting that Galaxy Digital did not admit or deny the NY AG's allegations in the settlement agreement. In addition, at the end of last year, a subsidiary of Jump Crypto reached a $123 million settlement with the SEC for a similar LUNA manipulation case, while Terraform Labs reached a $4.7 billion settlement with the SEC.
