Terraform Labs Blames Third-Parties for USTC Collapse

Terra Classic Do Kwon

Terraform has asked the court to make Citadel share its trading records from May 2022. They argue that Citadel’s CEO, Ken Griffin, planned to bet against the stablecoin when it fell. Terraform suggests that TerraUSD’s drop was a result of actions by various third-party players.

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On October 10, Terraform Labs took legal action by filing a motion in the U.S. District Court for the Southern District of Florida. They’re seeking permission to investigate Citadel Securities’ trading records. Terraform once again accused Citadel, an American market-making firm, of being responsible for the collapse of TerraUSD (UST).

Terraform’s specific request is that the court compels Citadel to share documents related to their trading activities in May 2022, which is when TerraUSD (UST) experienced a significant drop in value. Terraform’s argument is that the stablecoin’s fall wasn’t due to a glitch but rather a deliberate and coordinated effort by “third-party market participants.”

In the court filing, Kenneth Griffin, the CEO of Citadel, was brought into the spotlight. The document stated, “Cryptocurrency market traders received information, or came across rumors, suggesting that Ken Griffin and/or Citadel were planning to short UST.” Additionally, the filing included a snapshot from a Discord channel conversation with a trader who claimed to have had a discussion with Griffin.

According to the trader, Griffin indicated his intention to aggressively short Luna UST by using a highly leveraged trading strategy. While Citadel Securities has previously denied similar accusations, they have not yet issued any statements regarding these recent allegations.

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Terraform’s Court Filing Seeks to Compel Citadel’s Trading Documents

In a recent court filing, Terraform expressed concerns about its defense being compromised if Citadel Securities withholds certain trading information. The company has also requested that the case be moved to the U.S. District Court for the Southern District of New York if the current filing is rejected.

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TerraUSD’s Depegging in May 2022 Marked the Crypto Winter

The depegging of TerraUSD in May 2022, resulting in a loss of over $40 billion, marked the onset of the crypto winter. Subsequently, the company and its key executives, especially Founder Do Kwon, faced increased regulatory scrutiny.

Controversy Surrounds Founder’s Alleged Prior Knowledge of Collapse

Despite Terraform’s claims, there have been reports suggesting that the troubled blockchain founder, Do Kwon, had prior knowledge of the TerraUSD collapse. The company is currently entangled in a lawsuit with the U.S. Securities and Exchange Commission related to the collapse.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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  • Asad

    Asad is a dynamic and talented cryptocurrency content author who brings a wealth of knowledge and enthusiasm to every article. With a deep understanding of blockchain technology and a passion for digital assets, Asad's writing is both informative and engaging.

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