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Do Kwon-founded Terraform Labs has once again blamed market maker Citadel Securities for its role in an alleged international effort to cause the depegging of its TerraUSD (UST) stablecoin.
Terraform has sought several documents from Citadel, which it alleges will prove the market maker was involved with the UST depeg.
Terraform Labs Allegations Against Citadel
In line with its allegations against Citadel, Terraform Labs filed a motion to compel Citadel Securities to produce certain data responsive to a third-party subpoena. The motion was filed in the United States District Court in the Southern District of Florida. The motion to compel states that Citadel Securities must produce documents related to its trading activities in May 2022. This was the same time the UST stablecoin lost its peg.
Terraform argues in its motion that the documents are crucial for its defense in the lawsuit filed against it by the United States Securities and Exchange Commission (SEC). The lawsuit filed by the SEC alleges that Terraform Labs and its founder, Do Kwon, orchestrated a multi-billion dollar crypto asset securities fraud.
The motion also says that the company had served subpoenas to both Citadel Securities and Citadel Enterprise Americas. The motion contends that the May 2022 depeg of UST, when the stablecoin went from $1 to $0.02, was caused by third-party participants who intentionally shorted the stablecoin.
“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.”
Citadel Connected With Depeg
Terraform has also pointed to publicly available evidence suggesting that the head of Citadel Entities, Ken Gri
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Author: Amara Khatri
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