#Terraform Labs Links LUNA and #UST Crash to Citadel's Ken Griffin
Terraform Labs (TFL) has filed a motion to compel Citadel Securities to disclose documents related to its trading activity in May 2022.
In early May of that year, the algorithmic stablecoin #TerraUSD (UST) lost its peg to the US dollar, leading to a collapse in the token LUNA, resulting in traders and investors losing around $40 billion. TFL, the company behind the Terra ecosystem, contends that the asset's decline was not due to algorithm instability, contrary to the SEC's accusations.
"Instead, the Applicant contends that the market was destabilized by coordinated, deliberate efforts by certain third-party participants to short UST and force it off the dollar peg,"
The company cited "publicly available evidence" suggesting that Citadel's founder and CEO, Ken Griffin, intended to orchestrate a stablecoin sell-off.
The motion quotes Remi Tetot, Head of Global Macro Investor Research, who allegedly wrote after a lunch with Griffin that they were "going Soros style to #LUNA and UST."
TFL also pointed to a tweet by entrepreneur Jacob Canfield on May 10, 2022, describing Citadel's alleged UST shorting operations. The investment firm strongly refuted these claims, including in comments to Forbes. As one of the pieces of evidence linking Citadel to the TFL collapse.
"There's nothing surprising about this. Citadel, with roughly $61 billion of investment capital at its disposal, is precisely the kind of organization that has the funding, resources, and skills to make colossal bets and even attempt to intentionally move markets," TFL said.
The company has requested the Southern District of Florida court to demand information from Citadel regarding "trading operations, strategies, and wallet interactions concerning Terra's native tokens and financial instruments."
TFL claims that these documents are crucial for its defense against the SEC's civil lawsuit. The regulator has brought claims against the company and its CEO, #DoKwon related to a multi-billion dollar securities fraud.
