In a bid to defend itself against the “complex cryptocurrency action” brought against it by the US Securities and Exchange Commission (SEC), Terraform Labs has once again filed a motion against Citadel Securities, asking the court to compel the market maker to provide certain documents.
Citadel May Have Caused UST Depeg
In the court filing dated October 10, Terraform Labs, the company that developed the Terra blockchain and supported the UST stablecoin, alleged that UST’s collapse wasn’t caused by any instability in the token’s ecosystem but by the “concerted, intentional effort of certain third party market participants” who shorted and caused the token to de-peg from its dollar price.
One of these “third party market participants,” which Terraform suspects, happens to be Citadel Securities, and that is why the firm has brought this motion asking the court to compel it to produce certain trading data which it believes could be integral in proving its case in the lawsuit instituted against it by the SEC.
The SEC had accused Terraform and its founder, Do Kwon, of making false representations about UST’s stability. Specifically, the Commission asserted that the defendants misrepresented how well the “mint/burn” design could withstand market forces. UST is an algorithmic stablecoin that maintained its dollar beg by ensuring that supply and demand were always balanced.
In the court documents, Terraform laid out the basis for its accusation and why the court should issue the subpoen
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Author: Scott Matherson
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