The recent legal action of the Prosecutor General of the State of New York (NAYG) against Galaxy Digital about its promotional links with the cryptocurrency Terra (Luna), now offset, was unfair and an abuse of the legal system, explains Skybridge Capital and the founder Anthony Scaramucci.
“It is the law, outright due to an obscure but dangerously powerful New York law known as Martin Act,” said Scaramucci in a post of March 28.
Martin Law can “open the door to abuse”
“The law does not need to prove the intention, creating a low level of evidence which can open the door to abuses like this. It should not exist,” he said.
The Martin de New York law is one of the strictest anti-fraud and securities laws in the United States, allowing prosecutors the power to pursue cases of financial fraud without the need to prove the intention. The NAYG allegedly alleged that Galaxy Digital had violated the Martin law about its alleged terra promotion, Galaxy Digital accepting a regulation of $ 200 million.
According to NAYG documents filed on March 24, Galaxy Digital acquired 18.5 million Luna tokens at a 30% discount in October 2020, then promoted them before selling them without respecting the disclosure rules.
Scaramucci reiterated that the CEO of Galaxy, Michael Novogratz, had the impression that everything he said about Luna was true, because he had been deceived by Terraform Labs and his old CEO, Do Kwon.
Source: Amanda Fischer
Meanwhile, the president of Moonpay of the Enterprise, Keith Grossman, said that he had never heard of Martin’s act and had to look for it using the Ai Chatgpt chatbot.
“It is so wide and is essentially the essence of the law,” said Grossman. “Sorry, you were caught up in the reticle of it, Mike,” he added.
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The file allegedly alleged that Galaxy helped a “little known” token, referring to Luna, increasing its market price by $ 0.31 in October 2020 to $ 119.18 in April 2022 while “taking advantage of hundreds of millions of dollars”.
The manager of assets and investor Anthony Poseliano said that he did not know the details of the trial, but that he garnished Novogratz, calling him a “good man” who spent a lot of time and money to help others.
The collapse of the terra is one of the most infamous failures in the cryptographic industry. In March 2024, DEF lawyer Devon Starten said in the American district district court in New York district that Terra was a “card house” that collapsed for investors in 2022.
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