Terraform Labs accuses Citadel of orchestrating UST stablecoin fall
Terraform Labs, founded by Do Kwon, has once again accused Citadel Securities of deliberately causing the depegging of its TerraUSD (UST) stablecoin in 2022. On Oct. 10, the company filed a motion in the United States District Court for the Southern District of Florida to compel Citadel Securities to release documents related to its trading activities in May 2022. This was when Terraform’s stablecoin, now rebranded as TerraUSD Classic (USTC), lost its peg to the U.S. dollar. The motion filed by Terraform alleges that the depegging of its stablecoin was not a result of algorithmic instability but was a calculated move by certain market participants. The company argues that these third parties engaged in short-selling the stablecoin, causing its value to plummet from $1 to $0.02. Furthermore, the motion references “publicly available evidence” that suggests Citadel CEO Ken Griffin intended to short the stablecoin during the period of the de-peg in May 2022. The ev...