Terraform Labs, the entity behind Terra (LUNA) and TerraUSD (UST), has alleged that trading firm Citadel Securities played a role in the collapse of its stablecoin.
In a motion filed on Oct. 10 in the United States District Court in the Southern District of Florida, Terraform Labs asked the court to compel Citadel to produce trading data around the time of UST’s depeg in May 2022.
Terraform said it reduced the scope of its subpoena demands from Citadel to focus on the critical trading data around the time of the depeg, but Citadel still refused to turn over any documents except for one.
Lawyers for Terraform said that this information would be crucial to its defense, and as such, the court should compel citadel to release the data.
The lawyers further argued that there was “publicly available evidence suggesting that the head of the Citadel Entities, Ken Griffin, intended to short UST” at the time of the depegging event.
Open source information, such as information on Discord where one member of a channel claimed to have lunch with Griffin twice a month, said that the Citadel chief intended to short UST.
The motion also cited publicly available information from blockchain research firm Nansen, which detailed how seven well-funded traders carried out an attack on UST.
“Movant [Terraform] 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,” stated the motion.
Terraform is also seeking documents from bankrupt crypto exchange FTX, to use in its defense against a lawsuit from the U.S. Securities and Exchange Commission (SEC) alleging that the firm orchestrated a multi-billion dollar crypto fraud.