A big disagreement has erupted in the crypto world over Galaxy Digital’s $200 million settlement with New York’s Attorney General (NYAG). Let’s break it down.
The NYAG’s Case Against Galaxy Digital
The NYAG accused Galaxy Digital, headed by Michael Novogratz, of shady dealings with the now-defunct Terra (LUNA) token. Specifically, they say Galaxy Digital bought LUNA at a discount in 2020, then hyped it up, driving the price from $0.31 to $119.18 before selling its holdings for a huge profit. When LUNA crashed, wiping out $40 billion in investments, the NYAG claimed Galaxy Digital’s actions violated New York law. They cited a lack of disclosure about their selling activities as a key violation.
Two Sides of the Same Coin
Reactions to the settlement have been sharply divided.
Scaramucci’s Take: It’s Lawfare!
Anthony Scaramucci, founder of SkyBridge Capital, strongly defended Galaxy Digital. He argued that the company acted based on information from Terraform Labs, and called the NYAG’s actions “lawfare”—using the legal system to unfairly target a company. He criticized the Martin Act, a New York law used in the case, for having a low standard of proof, making it easy to abuse.
Belshe’s Counterpoint: Pump and Dump
Mike Belshe, CEO of BitGo, disagreed. He argued the NYAG presented a solid case, pointing to the classic “pump and dump” scheme that appeared to be at play with Galaxy Digital’s actions. While Belshe opposes excessive regulation, he stressed the need for responsible behavior in the crypto market.
The Broader Crypto Picture
Meanwhile, the overall crypto market is currently valued at $2.65 trillion, down slightly from last week. Bitcoin still dominates, holding a 61.2% market share, followed by Ethereum (8.2%) and other altcoins.
