Galaxy Digital Hit with $200M Fine Over LUNA Token Scandal

Billionaire investor Mike Novogratz’s Galaxy Digital is facing a $200 million reckoning. The crypto-focused investment firm has reached a settlement with New York’s Attorney General following accusations of market manipulation tied to the ill-fated LUNA token.

Investigators claim Galaxy acquired 18.5 million LUNA tokens via a preferential deal with Terraform Labs in 2020. The firm then launched a major publicity campaign for LUNA, while allegedly concealing token sales that would have influenced public and investor sentiment.

They’re dying to get real Macro guys involved with Terra, but they need someone who will actually talk about their product. A couple of media appearances talking about Terra would be huge. Without making a commitment to something like this we’d only be able to get the same terms they’ve given other investors (30 percent discount on 12-month lock),

stated in legal disclosures filed by Galaxy during the proceedings.

Opposing parties argued that Galaxy's involvement effectively fueled the token’s explosive rise from $0.31 — after acquiring it below market value — to a record-setting $119. This run-up, however, masked the underlying fragility of the Terra project. When its business model imploded, it dragged the entire ecosystem down with it, erasing more than $60 billion in value, including the collapse of the Terra USD stablecoin.

Galaxy Digital’s Profits Hold Strong — and Its AI Bet Could Be Worth Billions

Legal headaches aside, Galaxy Digital is thriving. The crypto investment giant booked $174 million in profit in Q4 and a massive $365 million across 2024 — even after settling a major lawsuit. The firm’s not just surviving, it’s evolving.

Check this out: Avalanche Raises $250M from Galaxy Digital and Other Funds

Case in point: its newly inked 15-year deal with CoreWeave, securing 133 megawatts to power the Helios data center in West Texas. With AI and high-performance computing as its focus, this project alone could drive $4.5 billion in revenue in the coming years.

This episode is a clear signal to the crypto world: never stop questioning — even when the players are big.

Galaxy Digital’s next chapter must be about more than damage control. Only by exceeding investor expectations — through profitability and bold, integrity-led ventures — can it reclaim its position as a trusted leader in the digital asset space.

Read on: Microsoft Pulls Plug on Data Centers—Mining Stocks Slide