Scaramucci Slams NYC Lawsuit Over Galaxy Digital's LUNA Promotion
29.03.2025 13:55
New York Attorney General's lawsuit against Galaxy Digital for its promotion of Terra (LUNA) has sparked a fierce response from industry figures. Anthony Scaramucci and SkyBridge Capital have labeled the legal action as 'lawfare,' arguing that the use of New York’s strict Martin Act is an abuse of the legal system. The lawsuit alleges that Galaxy Digital acquired a large volume of LUNA at a discount and promoted the token before selling it without proper disclosure, a move that allegedly helped push LUNA's price from $0.31 in October 2020 to a peak of $119.18 in April 2022. Meanwhile, other voices in the industry, including MoonPay's Keith Grossman, expressed disbelief at the breadth of the Martin Act, further underlining the controversy. This legal battle is unfolding in the broader context of the Terra collapse, one of the crypto industry's most notorious failures. The outcome of this case could have significant ramifications for promotional practices and legal liabilities in the crypto space, particularly around how discounted token acquisitions and subsequent promotions are handled.
The ongoing lawsuit may put downward pressure on LUNA's price in the short term due to increased regulatory scrutiny and investor uncertainty over token promotion practices. The negative sentiment stemming from accusations of legal overreach and the controversy over Galaxy Digital's promotional methods may trigger volatility, as investors reassess the risks tied to similar maneuvers. Over the long term, if stricter regulatory practices are enforced, the incident might contribute to a more cautious market environment which could suppress speculative rallies but potentially stabilize prices by reducing overly aggressive promotional tactics. The dynamics indicate a likelihood of immediate volatility with a possibly subdued recovery as legal standards are clarified, leaning towards a negative impact on LUNA's market perception.