Terraform Labs Accuses Citadel Securities For USTC Price Manipulation

Terraform Labs Accuses Citadel Securities For USTC Price Manipulation
Terraform Labs Accuses Citadel Securities For USTC Price Manipulation

On October 10, Terraform Labs submitted a motion to compel Citadel Securities to divulge information about their trading actions in May 2022, when USTC’s value diverged from its intended value, at the U.S. court in Florida.

Do Kwon’s company, Terraform Labs, has again charged Citadel Securities with intentionally attempting to cause its stablecoin, TerraUSD Classic (USTC), to lose value in 2022.

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screenshot from Terraform filing

It contends that the asset’s decline in value in May 2022 when it plummeted from $1 to $0.02 was not brought on by problems with its basic algorithm but rather by some external parties who purposefully bet against the stablecoin, bringing about a sharp decline in its price.

Additionally, the court filing states that there is “evidence that is accessible to the public” suggesting that Ken Griffin, the founder of Citadel, may have planned to wager against the stablecoin’s value just before it lost its fixed price. The trader claimed Griffin disclosed their desire to use trading methods associated with George Soros, which include placing large amounts of borrowed capital at risk, when discussing TerraUSD.

According to Forbes, Citadel Securities had previously denied trading TerraUSD in May 2022. In the February complaint that the U.S. Securities and Exchange Commission (SEC) filed against Terraform, the SEC claims that a few documents are crucial to Terraform’s defense. The SEC is holding Terraform Labs and its creator, Do Kwon, accountable for their alleged participation in a major crypto asset securities fraud scheme.

Terraform is requesting that the case be transferred to the U.S. District Court for the Southern District of New York, and they want Judge Rakoff to make the decision if the court does not order Citadel to turn up these documents.

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