Terraform Labs Accuses Citadel Securities of Shorting UST During De-pegging

Terraform Labs has made serious accusations against Ken Griffin, the head of Citadel Securities, suggesting their potential role in de-pegging TerraUSD (UST).

Moreover, on October 10, Terraform Labs kicked off legal action in a Florida court. Their goal? To get Citadel Securities to hand over key trading data connected to UST’s drop in value in May 2022. They believe this data is vital for their defense in a lawsuit by the U.S. Securities and Exchange Commission (SEC). Citadel, however, has only shared one document and refused to share the rest.

Read more about this below.

Allegations are Flying!

The plot thickens. Terraform Labs also points to publicly available proof that Ken Griffin, the presumed mastermind behind Citadel Securities, might have tried to bet against UST during its drop. This info comes from discussions on platforms like Discord and data from blockchain research firm Nansen, which tracks the attack on UST by well-funded traders.

In their legal action, Terraform also pointed to public information suggesting that Ken Griffin, Citadel Entities’ head, might have tried to short UST when it was de-pegging. They found this info in open discussions and from a blockchain research firm called Nansen. 

Terraform alleges that these third-party market participants intentionally destabilized the market to cause UST to depress from its one-dollar price.

Read More: Terraform Labs Breathes Sigh of Relief as Class-Action Lawsuit Gets Dropped

All Eyes on Citadel’s Response

It’s important to note that Citadel previously denied any involvement in stablecoin trading, stating they don’t deal with stablecoins like UST. They made this statement publicly in May 2022.

The Southern District of Florida hasn’t responded to Terraform Labs’ October 10 filing yet. Terraform has also asked to move the case to the Southern District of New York, where the SEC’s case is based, and to have Judge Jed Rakoff oversee the case.

Additionally, Terraform is also seeking documents from the bankrupt crypto exchange FTX to defend against a lawsuit from the U.S. Securities and Exchange Commission, which alleges the firm orchestrated a multi-billion dollar crypto fraud. But that’s another story altogether.

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