Galaxy Digital Agrees to $200M Settlement Over Its Role in Promoting TerraLuna

Galaxy Digital, the crypto investment firm led by Mike Novogratz, agreed to a $200 million settlement with the New York Attorney General's office over its role in promoting the now-defunct TerraLuna cryptocurrency project.

Crypto investment firm Galaxy Digital, headed by Mike Novogratz, has settled with the New York Attorney General’s (NYAG) office for $200 million over its role in promoting the now-defunct TerraLuna cryptocurrency project.

The AG’s office alleged that Galaxy was quietly selling millions of dollars’ worth of LUNA tokens while simultaneously promoting the asset to U.S. investors — without disclosing its massive exit strategy.

The agreement was formalized through an Assurance of Discontinuance filed by Attorney General Letitia James.

The document claims that endorsements from Galaxy and Novogratz were key in pushing the South Korea-based project into the U.S. market.

“While Novogratz posted pictures of his tattoo and expressed his Luna bullishness to the public, Galaxy sold millions of tokens into the market at many multiples of its initial cost without disclosing that it was selling,” the AG’s office stated.

Galaxy allegedly helped boost LUNA’s price from $0.31 in late 2020 to over $119 by April 2022, ultimately pocketing hundreds of millions in profits.

The regulators say the firm’s undisclosed exit contributed to the token’s dramatic collapse, which triggered widespread damage across the crypto industry.

Though Galaxy Digital did not admit or deny the allegations, the NYAG found the company violated the state’s Martin Act and Executive Law by failing to properly disclose its activities to investors.

Galaxy Digital is among the issuers of spot Bitcoin and Ether ETFs in the U.S., in collaboration with investment manager Invesco. The Bitcoin ETF (BTCO) manages assets worth $525 million, whereas the Ether ETF (QETH) holds $15.3 million. The total assets under management at Galaxy Asset Management stood at $4.6 billion.

Galaxy Digital’s founder and CEO Mike Novogratz has likened the firm’s ambitions to becoming the “Goldman Sachs of crypto.” As such, Galaxy’s financial performance often mirrors broader industry trends due to its diverse operations.