Terraform Labs Accuses Citadel Securities of Involvement in UST Depeg
Terraform Labs, founded by Do Kwon, has once again pointed the finger at market maker Citadel Securities for its alleged role in an international effort to cause the depegging of TerraUSD (UST), the stablecoin. Terraform has filed a motion in a US District Court, requesting that Citadel produce documents related to its trading activities in May 2022 when UST lost its peg. These documents are crucial for Terraform’s defense against a lawsuit filed by the SEC, accusing the company and its founder of crypto asset securities fraud.
Citadel’s Connection to the Depeg
Terraform has presented publicly available evidence suggesting that Ken Griffin, head of Citadel Entities, planned to short UST during the depeg. Despite Citadel Securities denying any involvement in trading UST at that time, Terraform claims to have evidence connecting the market maker to the depeg. Citadel has already denied these rumors in the past and stated that it does not trade stablecoins.
Citadel’s Denial and Terraform’s Response
In response to subpoenas, Citadel reiterated that it does not trade Terra Financial Instruments or Terra-native tokens and therefore does not have any responsive documents. It called Terraform’s motion “frivolous” and based on false social media posts. If the judge refuses to compel Citadel to produce the requested documents, Terraform has requested that the matter be transferred to another court for a decision.
Hot Take: The Battle Continues Between Terraform and Citadel
The ongoing dispute between Terraform Labs and Citadel Securities continues as Terraform accuses Citadel of involvement in the depegging of its stablecoin. While Terraform seeks evidence from Citadel to support its defense in a lawsuit filed by the SEC, Citadel denies any connection to the depeg and insists it does not trade stablecoins. The outcome of this battle will determine whether Citadel will be compelled to produce the requested documents. As the case progresses, it remains to be seen how the court will rule and what impact it will have on the future of Terraform and Citadel.
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