Terraform Labs, a defunct cryptocurrency network, has accused Citadel Securities of intentionally undermining its stablecoin, TerraUSD Classic (USTC), in 2022.
Terraform Labs filed a document in a US District Court, alleging that Citadel Securities shorted USTC, causing it to lose its peg. This claim is supported by publicly available evidence and allegations that Citadel’s head, Ken Griffin, planned to short the stablecoin.
USTC’s dramatic drop in May 2022 was initially attributed to algorithm instability but is now attributed to third-party market participants. Terraform Labs also pointed out Citadel’s large assets and a previous fine for market manipulation.
Meanwhile, Terraform Labs’ founder, Do Kwon, faces legal troubles, including a multi-billion-dollar fraud case. A recent drop in a class action lawsuit against him and Terraform Labs has lessened their legal issues.
In June, the former cryptocurrency influencer was incarcerated for four months in Montenegro for falsifying travel documents, but he faces more pressing legal issues in the United States and South Korea.
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