Anthony Scaramucci stated that the lawsuit filed by the New York Attorney General’s Office (NAYG) against Galaxy Digital was unfair and an abuse of the legal system. In a March 28 X post, Scaramucci said, “This is ‘lawfare,’ plain and simple, due to an obscure but dangerously powerful New York law known as the Martin Act.”

Scaramucci Criticizes the Martin Act in Opposition to Galaxy Digital Lawsuit

Scaramucci criticized the Martin Act, stating, “This law doesn’t require proving intent, which creates a low standard of proof and opens the door for abuses like this. This law should not exist.” The Martin Act is one of the strictest fraud and securities laws in the U.S., allowing prosecutors to pursue financial fraud cases without needing to prove intent. NAYG alleged that Galaxy Digital violated the Martin Act for promoting Terra and Galaxy Digital agreed to a $200 million settlement.

Grossman Criticizes NAYG’s Lawsuit Against Galaxy Digital

MoonPay’s Vice President of Enterprise Keith Grossman said he had never heard of the Martin Act and had to research it using ChatGPT. Grossman remarked, “It is so broad and essentially the essence of lawfare,” and expressed his sympathy for Galaxy Digital CEO Mike Novogratz, stating he was sorry Novogratz became a victim of it.

The lawsuit claims that Galaxy Digital helped raise the price of Terra (LUNA) tokens from $0.31 in October 2020 to $119.18 in April 2022, making hundreds of millions of dollars in profits.

Asset manager Anthony Pompliano stated that while he was not familiar with the details of the lawsuit, he vouched for Novogratz, calling him a “good man” who has spent a lot of time and money helping others. The Terra collapse is considered one of the biggest failures in the crypto world, and SEC attorney stated that Terra collapsed in 2022 like a “house of cards.”

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