Wall Street tycoon blasts NYAG: Calls Galaxy Digital's $2 billion fine an "abuse of law"
Anthony Scaramucci, a Wall Street tycoon, recently publicly blasted the New York Attorney General's Office (NYAG) to defend Galaxy Digital, founded by his friend Mike Novogratz.
The dispute stems from the $2 billion fine issued by New York State to Galaxy Digital, accusing it of violations in promoting the collapsed Luna coin.
Scaramucci bluntly stated on social media X that the penalty was a pure "abuse of law" and the real culprit should be Terra founder Do Kwon, who has absconded.
The cause of the incident dates back to March 28, when the New York Attorney General accused Galaxy Digital of vigorously promoting the token without fully disclosing its holdings to investors after purchasing 18.5 million Luna coins at a low price of $0.31 in 2020.
It is worth noting that Novogratz himself was an avid supporter of Luna coin, and even tattooed the relevant pattern on his body when the price of Luna exceeded $100 in December 2021. But with the collapse of the Terra ecosystem, this tattoo has now become "evidence" in the eyes of regulators.
According to the settlement agreement, Galaxy Digital needs to pay a $2 billion fine in installments over the next three years, and the first installment of $40 million will be received within 15 days.
Scaramucci was strongly dissatisfied with this. He believed that the Martin Act gave regulators too much power because it allowed convictions without proving the defendant's intent.
He also pointed out that the New York State's punishment was in serious contradiction with the regulatory actions at the federal level. He also added that the SEC and the Department of Justice should have been pursuing Do Kwon and Terraform Labs.
The impact of this case in the crypto industry is not only due to the huge fine, but also deeply touches on the core controversy of industry regulation:
That is, when a token project collapses, especially in the current situation where there is no clear regulatory framework, the differences in enforcement standards between state and federal regulators have brought huge compliance uncertainty to industry participants.
And this phenomenon of "over-regulation" may have a suppressive effect on financial innovation and make institutions timid when promoting new projects.
Do you think institutions that promote collapsed projects should be "jointly punished"?Leave a message in the comment section to discuss!
