The post Terraform Labs’ New Filing Reveals Who Was Responsible For The May 2022 UST Stablecoin Depeg Catastrophe ⋆ ZyCrypto appeared on BitcoinEthereumNews.com.

Advertisement &nbsp &nbsp In an intriguing disclosure, Do Kwon-co-created Terraform Labs has held trading firm Citadel Securities responsible for causing its so-called algorithmic TerraUSD (UST) stablecoin to lose its peg to the U.S. dollar in 2022. Terraform Labs Lays Blame On Citadel Securities Terraform Labs, on October 10, filed a motion in the U.S. District Court for the Southern District of Florida. The motion aims to push Citadel Securities into handing over documentation relating to its trading actions in May 2022 — which is around the time UST stablecoin veered wildly from the dollar peg and wiped out over $40 billion in investors’ money. Terraform Labs alleges that UST’s collapse from $1 to as low as $0.02 did not stem from an algorithmic failure but was triggered by “certain third-party market participants” who deliberately shorted the stablecoin. “Movant contends that the market was destabilized due to the concerted, intentional effort of certain third party market participants to “short” and cause UST to depeg from its one dollar price.” Terraform contends that the documents are necessary for its defense in the complaint lodged by the U.S. Securities and Exchange Commission (SEC) in February, which accuses the firm and its founder, Do Kwon, of “orchestrating a multi-billion dollar crypto asset securities fraud.” Advertisement &nbsp &nbsp If the court declines to make Citadel deliver the trading documents, Terraform urged the matter be moved to the U.S. District Court for the Southern District of New York for judgment by Judge Jed Rakoff. Citadel’s Ken Griffin Planned To Short UST Terraform Labs further cites “publicly available evidence” that indicates Citadel Securities boss Ken Griffin had intentions to short UST around the time of the devastating May depeg involving its sister coin Luna. The company’s filing includes a screenshot of a chat from a Discord Channel,…

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Filed under: News - @ October 15, 2023 11:00 pm