- Galaxy Digital settles $200M with NYAG over Terra LUNA case.
- Belshe advocates for “principles-based regulation” in crypto.
- The settlement raises questions about industry oversight.
The settlement emphasizes the need for regulatory clarity in the crypto sector, potentially impacting investor confidence and industry practices.
Regulatory Challenges Highlighted by Settlement
Galaxy Digital reached a settlement with the New York Attorney General over its involvement with the collapsed Terra LUNA cryptocurrency. This payment, spread over three years, is intended to resolve allegations related to fraudulent activities. Mike Belshe, a previous advocate for deregulation, noted the necessity of regulatory involvement to prevent such occurrences. He emphasized the importance of creating a regulatory framework that can adapt to the advancements within the crypto industry.
BitGo’s previous legal challenges include a lawsuit against Galaxy Digital following a failed merger in 2022. This lawsuit was dismissed initially but later proceeded, reflecting the ongoing legal complexities in crypto partnerships. Galaxy Digital’s cooperation with regulators, including the NYAG, has been highlighted by founder Mike Novogratz.
The settlement brings to light the complexities and challenges of enforcing regulation in the rapidly evolving crypto industry.
We need to structure this in a way that future-proofs it so that we aren’t in a place where it’s just executive orders and regulatory interpretations dictating whether an entire industry is turned on or turned off. This should not be possible. – Mike Belshe, CEO, BitGo
Regulatory approaches and demand for oversight are likely to affect investor trust and industry operations. The financial implications extend beyond Galaxy Digital, potentially influencing strategies and compliance efforts throughout the sector. Meanwhile, the debate continues over the use of the Martin Act, deemed dangerous by industry voices for its low proof standard, contributing to the contentious dialogue surrounding the case and crypto oversight in New York.
