Terraform Labs Files Motion Against Citadel Securities in SEC Lawsuit
Terraform Labs has filed a motion against Citadel Securities in its defense against the cryptocurrency-related lawsuit brought by the US Securities and Exchange Commission (SEC). The company is seeking to compel Citadel Securities to provide certain documents that could be crucial in proving its case. Terraform Labs alleges that UST stablecoin’s depegging from its dollar price was not caused by any inherent instability but by deliberate actions of third-party market participants, including Citadel Securities. The SEC had accused Terraform Labs and its founder of making false representations about UST’s stability, and Terraform Labs believes the requested trading data can support its defense.
Terraform Labs’ Accusations and Request for Subpoenas
In court documents, Terraform Labs outlined the basis for its accusations against Citadel Securities. Traders in the crypto markets allegedly received information or rumors that Citadel’s founder, Ken Griffin, intended to short UST around the time of its collapse. The company also referenced a Discord chat screenshot where a trader claimed to have regular meetings with Griffin and discussed plans to impact luna ust. Terraform Labs urged the court to grant its motion and compel Citadel Securities to provide the requested trading data, as withholding it could substantially impair their defense.
Possible Transfer of Motion to SDNY
Terraform Labs also requested that the court transfer the motion to the Southern District of New York (SDNY) instead of ruling on it directly. The company argued that since the SEC’s underlying case against them was already ongoing in SDNY under Judge Rakoff’s jurisdiction, it would be appropriate for him to manage this decision as well. Stakeholders in the crypto industry are closely following this case, particularly because Judge Rakoff has previously examined whether Terra’s coins could be considered securities.
Hot Take: Terraform Labs Fights SEC Lawsuit, Alleges Manipulation by Citadel Securities
Terraform Labs is taking a proactive approach in its defense against the SEC’s lawsuit by filing a motion against Citadel Securities. The company alleges that UST stablecoin’s depegging from the dollar was not due to any flaws in its design but rather intentional actions by third-party market participants, including Citadel Securities. By requesting certain trading data, Terraform Labs aims to support its case and disprove the SEC’s accusations of false representations. The outcome of this lawsuit will have significant implications for the crypto industry, as it will provide insights into the regulatory stance on stablecoins and market manipulation.
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