Terraform Labs Accuses Citadel of UST Collapse: Here’s Why?
The post Terraform Labs Accuses Citadel of UST Collapse: Here’s Why? appeared first on Coinpedia Fintech News
One of the most shocking downfalls of the cryptocurrency industry was that of Terraform Labs. The demise occurred with the fall of UST coins issued by Terraform Labs. In recent developments, Terraform alleges Citadel to be responsible and the main reason for this downfall.
Reason Behind the Allegation
On 13th October 2023, Terraform Labs, in its recent court filing for Memorandum of Law, in support of its motion to compel Citadel Securities to comply with the movant of the case, or in the alternative, transfer the ongoing trial to the Southern District of New York, the company has stated in its ‘ARGUMENTS’ about its allegation on Citadel.
Arguments Presented By Terraform Labs
In Argument I, Terraform claims that the Court should compel Citadel Securities to produce the limited and relevant documentation sought by the movant.
The arguments state that Citadel Securities must disclose papers about its trading activity in May 2022, according to the move to compel. The UST stablecoin lost its peg at the exact moment. The United States Securities and Exchange Commission (SEC) has sued Terraform, and Terraform claims in its application that the records are essential to its defense. According to the SEC’s lawsuit, Do Kwon, the founder of Terraform Labs, and the company staged a multibillion-dollar crypto asset securities fraud.
The motion also says the company had served subpoenas to Citadel Securities and Citadel Enterprise Americas. The motion contends that May 2022, depending on UST, when the stablecoin went from $1 to $0.02, was caused by third-party participants who intentionally shorted the stablecoin.
Quoting from the court filings, the argument states, “Movant [Terraform] contends that the market destabilization that occurred did not result from instability in the algorithm underlying the UST stablecoin. Instead, 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.”
Can it be a ‘Soros Style’ Attack?
Additionally, it was noted in the court documents that several traders had heard rumors regarding Citadel CEO Ken Griffin attempting to short the stablecoin UST.
According to documents, a pseudonymous trader, @GiganticRebirth, wrote in a Discord server: “I have lunch with Ken Griffin about twice a month… he was telling me over a nice bacon rib they were going to soros the f*** out of luna ust.”
According to some observers, the UST de-pegging was a “brilliant Soros-style attack.”
For this reason, Citadel is requested by Terraform Labs to provide papers “describing any trading strategy in any of the Terra-Native Tokens or the Terra Financial Instruments during the period March 1, 2022, through May 31, 2022.”
Alternative Measure
The movant, Terraform Labs, states that if such a motion to compel Citadel Securities to comply is not accepted and given force, they request the case transfer to the District of Southern New York as an alternative measure.
Filed under: Bitcoin - @ October 14, 2023 5:14 am