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Billionaire Ken Griffin’s Citadel Securities described as ”ridiculous” a claim by Terraform Labs that it was behind the collapse of the stablecoin terraUSD (UST).
The comment came in a court filing on Oct. 27 after Terraform Labs had filed a motion earlier this month that alleged Citadel was a major cause of one of the biggest collapses ever recorded in the cryptocurrency market’s history.
“To deflect attention from these allegations (and likely the crimes yet to be discovered), Terraform uses a motion to compel to pursue a ridiculous conspiracy theory exposing the purportedly hidden role of Citadel Securities in its self-imposed disaster,” the filing said. ‘`Not only is the time period of the request irrelevant, but the theory is baseless.”
Terraform Labs attributed the collapse of UST to social media posts published by the giant securities. Citadel responded that the social media sources in Terraform Labs’ claims, which included one by an account of the pseudonymous user “Gigantic Rebirth” that claimed Griffin had revealed a plan to depeg UST over ”a nice bacon rib” lunch, were ”absurd.”
Request to Reject Terraform Labs’ Filing
Citadel said it only engaged in two test transactions involving UST that were valued at “roughly thirteen cents” and asked the court to reject Terraform Labs’ filing.
“Because Terraform has no good-faith basis for its requests, the Court should reject its effort to abuse the discovery process and provide sanctions as it deems appropriate,” it said
The Collapse of the Terra Ecosystem
On May 7, 2022, the price of UST started wobbling and de-pegging from the dollar. In the 48 hours that followed, the then-$18-billion algorithmic stablecoin fell to 35 cents. This also caused LUNA, a token designed to stabilize UST, to fall from $80 to just a few cents on May 12, 2022.
Earlier this year, the US Securities and Exchange Commission (SEC) charged Terraform Labs and its former CEO, Do Kwon, with fraud, the sale of unregistered securities, selling unregistered security-based swaps and other related crimes.
Kwon was also charged with fraud by federal prosecutors hours after police in Montenegro arrested him.
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