In addition to promoting the token through the usual means, Novogratz got a large tattoo on his shoulder representing the token. Sadly for him, although the LUNA token would later fade away after crashing in spectacular (and fraudulent) fashion, tattoos are forever.
Galaxy Digital agrees to $200 million settlement over alleged LUNA manipulation
While many crypto firms have escaped enforcement actions from federal regulators thanks to massive industry lobbying, state enforcers are still on the beat. Crypto investment firm Galaxy Digital, headed by Mike Novogratz, has agreed to pay $200 million to settle market manipulation charges from the New York Attorney General, which accused Novogratz and his firm of promoting the token without disclosing they had acquired discounted tokens they were selling off at substantial profit.
- "Galaxy Digital Settles with NYAG for $200 Million Over Luna Ties", Wall Street Journal [archive]
Zero Edge crypto casino enters liquidation after founder gambles away its seed money
Richard Kim, the founder of the Zero Edge crypto casino, resigned on July 2, 2024 after blowing most of the project's seed funding. Kim was a former executive of Galaxy Digital, and Galaxy was among Zero Edge's investors. Within a day of closing a seed financing round on June 20, Kim had begun putting the money into leveraged crypto bets, resulting in "the significant loss of company funds". On June 29, he admitted in an email to Zero Edge shareholders that he had blown around $3.67 million in company funds.
Kim admitted in an interview with CoinDesk at the time that "I really fucked up. I lost this money. It was grossly negligent. But I didn't intend to go run away with this money." He claimed that it all began when he lost $80,000 to a phishing website. "This triggered my old demons, the need to 'make it back' to preserve my reputation. ... [I] started down a negative spiral of leverage trading, raising more capital, and hiding the truth. ... By the seed round's close, I was ready to rebuild, to start fresh, putting past demons aside. But the moment I received the proceeds, something snapped. I felt compelled to make up for my missteps. Within days, millions were in leveraged longs. When bitcoin crashed, I experienced a complete wipeout."
What remains of the Zero Edge company has petitioned for voluntary liquidation in the Cayman Islands, where it was registered. Company liquidators tell a slightly different story from Kim: that Kim misappropriated most of the company's assets and then "disappeared".
Silvergate crypto-focused bank faces crisis
Silvergate is a US bank that shifted its business toward primarily serving crypto clients. Following the collapse of FTX, there have been concerns over Silvergate's exposure to the losses experienced within the crypto industry. Short sellers piled in, making Silvergate the most shorted stock in late February.
On March 1, Silvergate revealed that they would miss the deadline to file their annual report with the SEC, which they blamed on regulatory inquiries. They also revealed even more losses, which added to the massive $887 million in losses they experienced in Q4 2022. They also disclosed that they were having to evaluate whether the bank was going to be able to survive.
Silvergate's stock plunged on the news, worsening its already marked decline in price over 2022–23. Some crypto firms began distancing themselves from the bank, as well: Coinbase announced on March 2 that they would no longer be transacting with Silvergate "in light of recent developments and out of an abundance of caution". Galaxy Digital, Paxos, CBOE, Gemini, Crypto.com, and Bitstamp also announced they would cease transfers to and from Silvergate, and Circle announced they would be "unwinding certain services with them".
Sports company Fanatics jettisons its majority stake in NFT company Candy Digital
"Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as a standalone business," wrote CEO Michael Rubin in an internal email explaining the decision to sell off Fanatic's share in NFT company Candy Digital. Candy Digital has created NFTs in partnership with MLB, Stranger Things, WWE, and various Nascar teams.
Fanatics purchased a 60% stake in Candy Digital in a $100 million Series A round in October 2021. Now, they've sold the stake to a group of investors led by Galaxy Digital for an undisclosed amount, in what Rubin wrote was "a rather straightforward and easy decision". He highlighted Fanatics' ability to "realize [when] things aren't working", he wrote in the email.
BitGo plans to seek damages from Galaxy Digital after they called off their $1.2 billion acquisition
In May 2021, investment management firm Galaxy Digital announced their plans to acquire crypto custodian BitGo for $1.2 billion in what would be the first $1 billion dollar deal for the crypto industry. At the time, crypto prices were near all-time-highs.
Galaxy Digital claims that BitGo failed to provide audited financial statements for 2021 by the deadline they had agreed upon, and for that reason they decided to end the deal.
BitGo claims they've still got time to provide the statements, and that Galaxy Digital owes them $100 million for breaking the deal, which they plan to pursue in court.
Galaxy Digital just reported a ~$555 million dollar loss in the second quarter, which may have contributed towards their choice to back out of the acquisition.
In June 2023, the Delaware Court of Chancery dismissed BitGo's complaint with prejudice, finding that Galaxy Digital had a "clean termination right" based on BitGo's failure to provide financial statements.