Galaxy Digital Settles for $200M Amid Terra Fallout

Key Takeaways
Galaxy Digital has reached a settlement with the New York Attorney General (NYAG) to pay 200 million USD. The reason is the allegation of negligence during the collapse of the cryptocurrency Terra (LUNA). Mike Belshe, CEO of crypto custody provider BitGo, publicly criticized Galaxy Digital’s behaviour and called for more ethical standards in the industry. At the same time, a political shift in U.S. crypto regulation appears to be emerging—depending on who holds the presidency.
Galaxy Digital to Pay 200 Million USD in Fines
The settlement between Galaxy Digital and the NYAG concerns the company’s allegedly irresponsible behaviour in connection with the collapse of the cryptocurrency Terra (LUNA). Investigations accuse Galaxy Digital of misleading investors and engaging in unethical sales practices. The payment is intended to avoid further criminal prosecution.
BitGo CEO Criticizes Unethical Behaviour
Mike Belshe, CEO of BitGo, spoke out clearly about the incident. On the platform X (formerly Twitter), he responded to a post by Anthony Scaramucci and made it clear that he considers Galaxy Digital’s behaviour unacceptable. He specifically criticized so-called “pump-and-dump” tactics: the company allegedly sold tokens as soon as they were unlocked, while simultaneously publicly promoting holding (“HODLing”). For Belshe, this is an example of what leads to excessive regulation.
Call for Principles-Based Regulation
Belshe advocates for principles-based regulation. This approach should not rely on rigid rules, but on ethical principles such as transparency and fairness. His central demand: anyone holding crypto-assets while publicly promoting them should disclose whether they are selling those assets. Only then can trust in the industry be restored.
Political Influence on Crypto Regulation
The debate around regulation is also politically charged. Under the Biden administration, numerous crypto companies such as Coinbase, Ripple, and Kraken have been sued by the U.S. Securities and Exchange Commission (SEC). With Donald Trump’s return, a shift in direction is becoming apparent. His designated SEC Chair, Paul Atkins, announced plans to create a “rational and coherent” regulatory framework for digital assets. The goal is to provide the industry with clear but fair guidelines.
Our Assessment
The Galaxy Digital case highlights the importance of transparency and ethical conduct in the crypto market. The substantial fine sends a message to the industry: irresponsible behaviour has consequences. At the same time, it becomes clear that regulation does not have to be hostile to innovation—if it is based on understandable principles. For you as a user or investor, this means: pay attention to the integrity of providers and inform yourself about their business practices. Political developments in the U.S. could also have long-term effects on global crypto regulation.
You should read that too:
-
Asian Slots – The Best Asia-Themed Online Slot Games
Reading time: ~ 3 minutes
-
Viking Slots: Best Norse-Themed Slot Games
Reading time: ~ 3 minutes
-
Anime Slots – Anime-Themed Slots
Reading time: ~ 3 minutes
-
Food and Drink Slots: The Best Slot Games Inspired by Culinary Delights
Reading time: ~ 3 minutes
-
Space Slots – Best Space-Themed Slots
Reading time: ~ 3 minutes