Terraform takes legal action against Citadel Securities, claiming a potential link to the UST depeg.
Terraform takes legal action against Citadel Securities, claiming a potential link to the UST depeg, and requests documents from Citadel to investigate the matter.
![Terraform takes legal action against Citadel Securities, claiming a potential link to the UST depeg.](https://news.investorturf.com/uploads/images/202310/image_750x_652936aa85417.jpg)
Terraform Labs has filed a motion requesting Citadel Securities to provide critical data in response to a third-party subpoena, which they argue is essential for their defense in the lawsuit brought by the US Securities and Exchange Commission against the company and its former CEO, Do Kwon.
The motion, aimed at compelling Citadel Securities and Citadel Enterprise Americas, focuses on acquiring trading data related to the May 2022 Depeg. Terraform's argument stems from publicly available evidence suggesting that Ken Griffin, the head of the Citadel Entities, had intentions to short UST around the time of the May 2022 Depeg. Additionally, Terraform claims to have evidence that Citadel Securities may have had a connection to the May 2022 Depeg, despite their public denial of involvement.
Terraform mentions that a specific document was produced, although its nature remains unclear. The requested information from Citadel Securities is limited to documents describing any trading strategy involving Terra-Native Tokens or Terra Financial Instruments during the period from March 1, 2022, to May 31, 2022.
Terraform also points to Nansen data, which led them to identify seven "whale" traders, capable of taking significant long or short positions in assets. The data revealed that a few players detected vulnerabilities early in the UST de-peg.
Terraform clarified that they issued subpoenas to certain market participants, including the two Citadel Entities mentioned above.
Citadel had previously refuted speculations, asserting that it "does not engage in trading stablecoins, including UST." In response to the initial subpoenas, Citadel informed Terraform that they had no involvement in trading Terra Financial Instruments or Terra-Native Tokens and, therefore, possessed no relevant documents.
A Citadel Securities representative labeled Terraform's motion as "frivolous," contending that it relied on misleading social media posts and disregarded information already provided, affirming their lack of involvement in the matter.
Terraform, in its filing, argued that Citadel should share the trading data because it could influence the SEC's case against Terraform and posed minimal or no burden to Citadel Securities.
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