Galaxy Digital has reached a $200 million settlement with the New York Attorney General’s office following an investigation into its involvement with the failed cryptocurrency LUNA and the TerraUSD stablecoin. The settlement is part of a broader crackdown on firms associated with the collapse of the Terra ecosystem in 2022, which resulted in billions of dollars in losses for investors worldwide.
The investigation found that Galaxy Digital, led by billionaire investor Mike Novogratz, had significant exposure to LUNA and played a key role in promoting the stability of the TerraUSD ecosystem. The company allegedly failed to disclose the full extent of its financial risks to investors, leading regulators to scrutinize its practices more closely.
“This agreement ensures that firms engaging in deceptive practices within the crypto industry are held accountable,” said New York Attorney General Letitia James. “Transparency and honesty are critical in protecting investors from fraudulent schemes.”
As part of the settlement, Galaxy Digital has agreed to implement enhanced compliance measures, increase transparency in its financial disclosures, and pay restitution to affected investors. The company did not admit to any wrongdoing but emphasized its commitment to cooperating with regulators to rebuild trust in the industry.
The collapse of the Terra ecosystem was one of the most significant events in crypto history, leading to market turmoil, multiple lawsuits, and heightened regulatory scrutiny. The case against Galaxy Digital adds to the growing list of legal actions targeting companies that had ties to Terraform Labs and its controversial algorithmic stablecoin model.
While this settlement marks a step toward accountability, it also underscores the continued legal risks facing firms that were involved in the TerraUSD crisis. Industry analysts believe that increased regulatory oversight will shape the future of stablecoins and crypto investments in the United States and beyond.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should research carefully before making any decisions. We are not responsible for your investment decisions.
