Galaxy Digital Holdings agreed to pay $200 million to settle allegations by the New York Attorney General (NYAG) that the firm unlawfully promoted Terra’s LUNA token while secretly planning to sell, and then selling, large portions of its holdings at a profit before the 2022 collapse. The NYAG’s Assurance of Discontinuance states that from 2020 onward Galaxy bought LUNA directly from Terraform Labs at a discount, promoted the token publicly, and simultaneously sold into the market without disclosing its present intent to sell or the scale of its profits, conduct the state characterizes as violating New York’s Martin Act and Executive Law §63(12). Galaxy and related entities will pay the $200 million as disgorgement to New York over several years; the settlement is civil, and the company does not admit or deny wrongdoing. The settlement is one of the largest state-level crypto enforcement actions tied to the Terra/LUNA failure, which erased more than $40 billion in market value and became a key reference point for regulatory concerns about algorithmic stablecoins. According to the NYAG and contemporaneous reporting, Galaxy and its founder Michael Novogratz helped “kickstart” market interest in LUNA, including high-profile public endorsements, while offloading millions of tokens and ultimately realizing hundreds of millions of dollars in profits before LUNA’s price collapsed. In addition to the monetary penalty, Galaxy agreed to implement tighter internal controls and restrictions around how it and its affiliates can trade and publicly comment on digital assets, signaling a broader shift toward more aggressive state enforcement of crypto-related conflicts of interest and promotional practices.

AI-generated background, compiled from web sources — not editorial content.

More coverage

Explore the topic

More on LUNA

Jane Street Accused of Orchestrating 2022 Terra UST–LUNA Death Spiral, Triggering $40B Crypto Meltdown, as Terraform Bankruptcy Administrator Files Manhattan Lawsuit in February 2026

Jane Street Accused of Orchestrating 2022 Terra UST–LUNA Death Spiral, Triggering $40B Crypto Meltdown, as Terraform Bankruptcy Administrator Files Manhattan Lawsuit in February 2026

WSJ ·

Terraform’s liquidators sued Jump Trading for $4B, alleging it secretly propped up UST, profited from Luna trades, and helped trigger crypto’s largest collapse, according to court filings and prior SEC claims.

Terraform’s liquidators sued Jump Trading for $4B, alleging it secretly propped up UST, profited from Luna trades, and helped trigger crypto’s largest collapse, according to court filings and prior SEC claims.

Cryptonews ·

Do Kwon sentenced to 15 years prison, to serve second half of sentence in South Korea

Do Kwon sentenced to 15 years prison, to serve second half of sentence in South Korea

ꘜ/@SynopticNewswire ·

DATs aren’t “the next LUNA,” but unwind risks exist. With little leverage, forced selling is unlikely, yet arb incentives grow if mNAV drops. Outcomes depend on how concentrated holdings are—few big players dampen risk, many big DATs amplify it.

DATs aren’t “the next LUNA,” but unwind risks exist. With little leverage, forced selling is unlikely, yet arb incentives grow if mNAV drops. Outcomes depend on how concentrated holdings are—few big players dampen risk, many big DATs amplify it.

𝕏/@Galois_Capital ·

Do Kwon changes plea to "Guilty." Inner City Press live-tweets the proceedings

Do Kwon changes plea to "Guilty." Inner City Press live-tweets the proceedings

Inner City Press ·

Terraform Labs crypto loss claims portal to open on March 31 and all claims must be submitted by April 30, 2025 at 11:59 p.m. ET

Terraform Labs crypto loss claims portal to open on March 31 and all claims must be submitted by April 30, 2025 at 11:59 p.m. ET

Medium ·

Explore the full feed

Comments

Up nextKamino launches Steakhouse-curated PAXG market for USDG loans against tokenized gold