{"id":10432,"date":"2025-03-30T10:08:29","date_gmt":"2025-03-30T08:08:29","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=10432"},"modified":"2025-03-30T10:08:29","modified_gmt":"2025-03-30T08:08:29","slug":"scaramucci-declares-naygs-lawsuit-against-galaxy-as-nothing-but-lawfare","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/03\/30\/scaramucci-declares-naygs-lawsuit-against-galaxy-as-nothing-but-lawfare\/","title":{"rendered":"“Scaramucci Declares NAYG’s Lawsuit Against Galaxy as ‘Nothing But Lawfare'”"},"content":{"rendered":"

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The recent judicial move by the New York State Attorney General\u2019s (NAYG) against Galaxy Digital concerning its marketing connections to the now-defunct cryptocurrency Terra (LUNA) was unjust and an exploitation of the legal framework, according to SkyBridge Capital and its founder, Anthony Scaramucci.<\/p>\n

\u201cThis is LAWFARE, plain and simple, due to a little-known yet perilously influential New York statute called the Martin Act,\u201d Scaramucci stated<\/a> in an X post dated March 28.<\/p>\n

Martin Law can \u201ccreate opportunities for exploitation\u201d<\/h2>\n

\u201cThe statute does not necessitate proof of intent, establishing a minimal burden of proof that can create opportunities for exploitation like this. It should not be in effect,\u201d he remarked.<\/p>\n

New York\u2019s Martin Act is one of the most stringent anti-fraud and securities regulations in the United States, empowering prosecutors to follow through with financial fraud cases without the requirement to demonstrate intent. The NAYG asserted that Galaxy Digital breached the Martin Act regarding its purported promotion of Terra, with Galaxy Digital consenting to <\/a>a $200 million resolution.<\/p>\n

As per documents filed by the NAYG on March 24, Galaxy Digital procured 18.5 million LUNA<\/a> tokens at a 30% discount in October 2020, then advertised them before divesting them while neglecting disclosure requirements.<\/p>\n

Scaramucci emphasized that Galaxy CEO Michael Novogratz genuinely believed that all statements regarding Luna were accurate, as he had been misled by Terraform Labs and its previous CEO, Do Kwon.<\/p>\n

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Source: <\/em>Amanda Fischer<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n

In the meantime, MoonPay’s enterprise president, Keith Grossman, remarked<\/a> that he had never encountered the Martin Act and needed to search for it using the AI chatbot ChatGPT.<\/p>\n

\u201cIt is overly expansive and essentially epitomizes lawfare,\u201d Grossman declared. \u201cSorry you got entrapped in its crosshairs, Mike,\u201d he added.<\/p>\n

Related: <\/strong><\/em>Sonic launches high-yield algorithmic stablecoin, rekindling Terra-Luna \u2018PTSD\u2019<\/strong><\/em><\/a><\/p>\n

The filing claimed that Galaxy facilitated a \u201clittle-known\u201d token, referring to LUNA, to elevate its market value from $0.31 in October 2020 to $119.18 in April 2022 while \u201cgaining profits in the hundreds of millions of dollars.\u201d<\/p>\n

Asset manager and investor Anthony Pompliano indicated he wasn\u2019t acquainted with the intricacies of the lawsuit but endorsed Novogratz, deeming him a \u201cgood man\u201d who has invested considerable time and resources into aiding others.<\/p>\n

The collapse of Terra stands as one of the most notorious failures in the cryptocurrency sector. In March 2024, SEC attorney Devon Staren stated<\/a> in the US District Court for the Southern District of New York that Terra was a \u201chouse of cards\u201d that fell apart for investors in 2022.<\/p>\n

Magazine: <\/strong><\/em>Arbitrum co-founder skeptical of the shift to based and native rollups: Steven Goldfeder<\/strong><\/em><\/a><\/p>\n