BITGO CEO Mike Belshe Strongly Supports Cryptocurrency Industry Regulation
BITGO CEO Mike Belshe expressed strong support for regulation in the cryptocurrency industry. This comes in light of Galaxy Digital’s recent $200 million settlement with the New York Attorney General (NYAG).
Belshe’s Argument for Sufficient Oversight
Belshe claims that the foundation of his regulatory argument is based on the belief that sufficient oversight is the most effective way to address industry issues that could lead to overregulation.
Belshe Condemns Galaxy Digital’s Actions, Warning of Industry-Wide Consequences
In response to Skybridge Capital founder Anthony Scaramucci’s position, Belshe pointed out that it is difficult to deny NYAG’s strong case against Galaxy Digital.
The Bitgo CEO criticized the company’s pump tactics, noting that it is unethical to promote tokens as long-term holds while immediately selling them.
Interestingly, he reiterated his admiration for Galaxy Digital CEO Novogratz and his contributions to the industry. However, Belshe stated that, given the NYAG’s policies, Galaxy Digital’s actions are unethical.
He remarked that whether this constitutes overreach of the law, such actions harm the reputation of the entire industry.
Therefore, Belshe argued that without organized scrutiny, it could lead to overregulation and urged users to read the part of the resolution that details the controls placed on Galaxy.
Galaxy Digital Settles with NYAG for $200 Million Over Luna Promotion Controversy
NYAG filed a complaint accusing Galaxy Digital Investment of violating the law by promoting assets without disclosing its intent to sell those assets. According to the documents, Galaxy did not admit or deny any wrongdoing during the trading period.
According to a recently released Galaxy earnings statement, the company and state authorities reached a settlement on March 27 regarding civil litigation about specific investments, trades, and public statements made about Luna between 2020 and the end of 2022.
To illustrate, in 2020, Galaxy and Novogratz began promoting Terraform Labs’ Luna Cryptocurrency, which was primarily used to algorithmically support the value of its sister coin, Terrausd.
Later, in mid-2022, the market value of both tokens nearly plummeted to almost nothing, consuming over $40 billion.
As part of the settlement with the New York Attorney General, Michael Novogratz’s Galaxy Digital Holdings was fined $200 million to pay for the investment firm’s involvement in promoting the failed Luna cryptocurrency.
The $200 million penalty will be paid in installments before 2028, taking into account the effects of discounting. Galaxy’s year-end performance included $166 million in legal provisions to pay the fine on March 28.
Novogratz stated that the decision was difficult and required careful consideration. He emphasized that over the past few years, Galaxy has fully cooperated with regulators, including the New York Attorney General.
He added that they were accused of unethical practices caused by deception from Luna founder Do Kwon and Terraform, admitting that they misled him and several other prominent institutional investors.
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