Terraform Labs filed a motion in a U.S. District Court to obtain Citadel’s May 2022 crypto trading data to uncover the dark game that Citadel played against UST stablecoin.
Citadel Securities LLC is an American market-making firm headquartered in Miami. It is one of the largest market makers in the world and is active in more than 50 countries. In 2002, this company was founded by Kenneth C. Griffin. In the last year, this firm generated $7.5 billion with its business activities.
On 10 Oct 2023, Terraform Labs, a South Korean blockchain firm responsible for the development of Terra blockchain, filed a motion in the U.S. District Court of Southern Florida to release Citadel Securities’ trading data from May 2022.
The filed motion noted that Citadel traded UST stabelcoin in the wrong way to gain a huge amount of benefit via an easy tactic of UST price downfall.
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In short, Terraform alleged that Citadel used its high amount of UST holding to short UST stablecoin to make a profit.
Through the court filing, Terraform Labs stated that there is some available evidence that proves Citadel was responsible for UST’s downfall.
UST downfall
In May 2022, UST stablecoin plunged from its pegged $1 value because of high volatility in the crypto market. According to available public evidence on the blockchain networks, many firms tried to short their UST stabelcoin holding to make a profit in a short time & such activities promoted the collapse of UST stabelcoin badly.
In the whole incident, Terra blockchain’s Terra stabelcoin & Luna con collapsed badly & resulted in a more than 50 billion retail investment loss.
US SEC vs Terraform labs
In early of this year, the United States Securities and Exchange Commission (SEC) sued Terraform Labs & Terraform co-founder Do Kwon for providing Terra crypto services in the US jurisdiction without any regulatory approval.
Read also: MetaMask integrates one one-click payment service, Stripe
Terraform Labs alleges Citadel was responsible behind the TerraUSD stablecoin collapse
https://bitcoinik.com/terraform-labs-alleges-citadel-was-responsible-behind-the-terrausd-stablecoin-collapse/feed/
https://bitcoinik.com/terraform-labs-alleges-citadel-was-responsible-behind-the-terrausd-stablecoin-collapse/feed/
