$Terraform Labs Blames Third-Parties for USTC Collapse

Terraform has asked the court to make Citadel share its trading records from May 2022. They argue that Citadel’s CEO, Ken Griffin, planned to bet against the stablecoin when it fell. Terraform suggests that TerraUSD’s drop was a result of actions by various third-party players.

On October 10, Terraform Labs took legal action by filing a motion in the U.S. District Court for the Southern District of Florida. They’re seeking permission to investigate Citadel Securities’ trading records. Terraform once again accused Citadel, an American market-making firm, of being responsible for the collapse of TerraUSD (UST).

Terraform’s specific request is that the court compels Citadel to share documents related to their trading activities in May 2022, which is when TerraUSD (UST) experienced a significant drop in value. Terraform’s argument is that the stablecoin’s fall wasn’t due to a glitch but rather a deliberate and coordinated effort by “third-party market participants.”

In the court filing, Kenneth Griffin, the CEO of Citadel, was brought into the spotlight. The document stated, “Cryptocurrency market traders received information, or# came across rumors, suggesting that Ken Griffin and/or Citadel were planning to short UST.” Additionally, the filing included a snapshot from a Discord channel conversation with a trader who claimed to have had a discussion with Griffin.

According to the trader, Griffin indicated his intention to aggressively short Luna UST by using a highly leveraged trading strategy. While Citadel Securities has previously denied similar accusations, they have not yet issued any statements regarding these recent allegations.