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Galaxy Digital, a leading company in the cryptocurrency sector, has reached a settlement worth $200 million with the New York Attorney General. The firm is facing allegations that it concealed its financial interests during the promotion of the LUNA token from the Terra ecosystem. The settlement is reportedly linked to the failure to disclose significant profits made during the rise of the LUNA token, with the attorney general claiming that the company engaged in misleading behavior that led to substantial market price movements.
Were Financial Interests Concealed?
The New York Attorney General’s office contends that Galaxy Digital purchased LUNA tokens at a low price in 2020 while conducting extensive promotions without revealing its financial interests to the public. The company’s marketing activities, conducted without disclosing its direct benefits from these assets, were deemed a serious violation of transparency. According to the prosecution, the firm bought LUNA in bulk and sold it in different parts as the price increased, generating hundreds of millions of dollars in profits.
It is claimed that Galaxy Digital acquired 18.5 million LUNA tokens at a discounted price and gradually sold them for significant revenue. Allegedly, the total revenue from these sales exceeded $100 million, while the company notably failed to make any public announcements during this process. Although the company did not explicitly accept the accusations, it has settled to bring an end to the legal proceedings.
Market Dynamics and Regulatory Discussions
The attorney general asserts that Galaxy Digital’s promotional activities directly impacted the rapid increase in the price of the LUNA token. The token’s price surged from $0.31 in October 2020 to $119.18 by April 2022. The role of companies influencing the market during this period has increasingly attracted the attention of regulatory bodies. The collapse following LUNA’s sharp rise and the losses incurred by investors have brought into question the transparency of trading volumes during this time.
Michael Novogratz, founder of Galaxy Digital, is closely monitoring developments in regulation. He notes that the regulatory framework for cryptocurrencies in the U.S. is changing, highlighting a broader acceptance of Bitcoin 
$103,279 reserves. According to him, this shift may accelerate global adoption of cryptocurrencies. However, incidents like LUNA demonstrate the extent of intervention that regulatory bodies can undertake.
Meanwhile, the LUNA token has recently fallen to weekly lows, losing nearly 7% in value within the last 24 hours and trading well below its previous price performance. This situation highlights factors influencing investor sentiment in the market. Experts indicate that such events illustrate the cryptocurrency market‘s sensitivity to regulatory measures.
