Terra-backer Galaxy Digital gives update on liquidity position

Capital Markets • May 13, 2022, 9:12AM EDT

UPDATED: May 13, 2022, 2:09PM EDT

Mike Novogratz's Galaxy Digital released a company update on Friday that gives visibility into its capital and liquidity position amid a frenzied crypto market tied to the meltdown of cryptocurrency Luna and associated algorithmic stablecoin TerraUSD (UST).

Galaxy Digital — an early backer of Terraform Labs and Luna — said in a release it "believes that the current digital asset and broader market conditions warrant providing shareholders, counterparties, and clients intra-quarter visibility regarding its capital and liquidity position, as well as its operating resilience."

The company said it has a liquidity position of about $1.6 billion, including $800 million in cash and an additional $800 million in cryptocurrencies. Meanwhile, quarter-to-date net comprehensive income is expected to come in at a loss of $300 million, a decline of 12% from March 31, according to the company. By way of comparison, the crypto market has declined by more than 37% year-to-date.

The firm added that it has no exposure to algorithmic stablecoins.

UST, an algorithmic stablecoin built on the Terra blockchain, unraveled this week, sending the price of Luna to nearly zero and the broader crypto market into a tailspin.

The news comes a few days after Galaxy announced a share repurchase plan, which would buy back 10.6 million shares over the next 12 months.

Galaxy is an early Terra backer, having invested in a January 2021 fundraise alongside Coinbase Ventures, Pantera Capital and Arrington Capital. Novogratz famously tweeted out his new tattoo of a wolf howling towards a moon with a banner with the word "Luna" adjacent to it.

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Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].