{"id":85686,"date":"2023-10-13T13:11:32","date_gmt":"2023-10-13T10:11:32","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=85686"},"modified":"2025-09-13T00:48:37","modified_gmt":"2025-09-12T21:48:37","slug":"terraform-labs-ties-luna-and-ust-collapse-to-ken-griffins-citadel","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/terraform-labs-ties-luna-and-ust-collapse-to-ken-griffins-citadel\/","title":{"rendered":"Terraform Labs ties LUNA and UST collapse to Ken Griffin&#8217;s Citadel"},"content":{"rendered":"<p>Terraform Labs (TFL) has filed in court <a href=\"https:\/\/www.courtlistener.com\/docket\/67867673\/1\/terraform-labs-pte-ltd-v-citadel-securities-llc\/\">a motion<\/a> to compel Citadel Securities to disclose documents related to its trading activity in May 2022.<\/p>\n<p>In early that month <a href=\"https:\/\/forklog.com\/en\/news\/algorithmic-stablecoins-how-alternatives-to-usdt-and-usdc-are-evolving\">algorithmic stablecoin<\/a> TerraUSD (UST) <a href=\"https:\/\/forklog.com\/en\/news\/luna-price-plunges-86-as-ust-stablecoin-slides\">lost its peg to the dollar<\/a>, which <a href=\"https:\/\/forklog.com\/en\/news\/blackrock-and-citadel-deny-involvement-in-ust-crash-as-luna-slumps-to-0-01\">caused a crash<\/a> in the token LUNA used to issue it. As a result, traders and investors lost about $40 billion.<\/p>\n<p>TFL, which is behind the Terra ecosystem, argues that the decline in assets was not the result of algorithmic instability despite <a href=\"https:\/\/forklog.com\/en\/news\/sec-charges-terraform-labs-and-do-kwon\">accusations<\/a> <span data-descr=\"U.S. Securities and Exchange Commission\" class=\"old_tooltip\">SEC<\/span>.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cThe motion states that, instead, the applicant asserts that the market was destabilized due to coordinated, deliberate efforts by certain external participants to short UST and push the price away from the dollar,\u201d the motion says.<\/p>\n<\/blockquote>\n<p>The filing cites publicly available evidence that suggests the founder and head of Citadel, Ken Griffin, planned to orchestrate a dump of the stablecoin.<\/p>\n<p>In the motion, there is a quote from Remi Tetot, head of research at Global Macro Investor. Allegedly after a lunch with Griffin, the trader wrote that they \u201care going to resort to Soros&#8217; strategy for the damn LUNA and UST.\u201d<\/p>\n<p>TFL also recalled Jacob Canfield\u2019s May 10, 2022 tweet in which he described Citadel&#8217;s alleged UST shorting operations. The investment firm at the time vehemently denied these claims, including in comments to <a href=\"https:\/\/www.forbes.com\/sites\/michaeldelcastillo\/2022\/05\/11\/blackrock-and-citadel-deny-trading-cratering-stablecoin\/?sh=68acce6d38f9\">Forbes<\/a>.<\/p>\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">Rumor is citadel is the culprit. <a href=\"https:\/\/t.co\/91F0jGnl5k\">pic.twitter.com\/91F0jGnl5k<\/a><\/p>\n<p>\u2014 Jacob Canfield (@JacobCanfield) <a href=\"https:\/\/twitter.com\/JacobCanfield\/status\/1523857775452987392?ref_src=twsrc%5Etfw\">May 10, 2022<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>As one piece of evidence of Citadel\u2019s involvement in the collapse, TFL pointed to examples of Griffin\u2019s use of shorts in some of his most profitable trades. This included profiting from the 1987 stock market crash when he was in his second year of college.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cThere\u2019s nothing surprising about that. Citadel, with roughly $61 billion in invested capital at its disposal, is exactly the kind of organization that has the funding, resources and the know-how to take colossal bets and even attempt to move markets intentionally,\u201d said TFL.<\/p>\n<\/blockquote>\n<p>The company asked the Southern District of Florida court to compel Citadel to disclose information on trading operations, strategies, and wallet interactions concerning native Terra tokens and Terra financial instruments.<\/p>\n<p>TFL maintains that the documents are crucial to its defense against the SEC civil lawsuit. The regulator has brought charges against the company and its CEO Do Kwon regarding orchestrating multi-billion-dollar securities fraud.<\/p>\n<p>In the event of a denial, the motion asked to transfer it to the Southern District of New York, where the SEC case is being heard.<\/p>\n<p>In March 2023, prosecutors in the same court filed charges against Kwon on eight counts. Among the latest: conspiracy to commit fraud and market manipulation, securities fraud, and investor deception.<\/p>\n<p>In July, the lawyers for the former head of TFL explained the UST collapse as a \u201ccoordinated short attack\u201d involving FTX. They also sought information from the bankrupt exchange as part of the defense in the SEC lawsuit.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Terraform Labs (TFL) has filed a court motion to compel Citadel Securities to disclose documents related to its trading activity in May 2022.<\/p>\n","protected":false},"author":1,"featured_media":85687,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[2252,1162,852],"class_list":["post-85686","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-citadel","tag-court-cases","tag-terra"],"aioseo_notices":[],"amp_enabled":true,"views":"38","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/85686","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=85686"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/85686\/revisions"}],"predecessor-version":[{"id":85688,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/85686\/revisions\/85688"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/85687"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=85686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=85686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=85686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}