Citadel Securities accused by Terraform of acting in ‘bad faith’ over UST depeg incident

The legal fight between Terraform Labs and Citadel Securities over the 2022 UST stablecoin issue presents a complicated situation filled with accusations, calling for a careful and unbiased review to find out what really happened.

Citadel Securities is caught up in a legal issue with Terraform Labs, connected to the 2022 instability of the stablecoin UST. In a strong response to Terraform’s legal request, Citadel firmly denies having any part in the matter, calling the accusations a far-fetched conspiracy theory. This article aims to break down this complex legal situation, keeping a balanced view.

Citadel Securites has responded in scathing fashion to an effort by Do Kwon’s lawyers to serve a subpoena on them. Kwon/Terraform Labs are hunting for evidence of a Citadel role in the UST depeg of May 2022, based on tweets from @GiganticRebirth, among other leads pic.twitter.com/vfO1clO0xu

— Alexander Osipovich (@aosipovich) October 26, 2023

Terraform accuses Citadel and Jump Trading of working together to raise asset prices, a claim that Citadel strongly denies. Citadel’s legal response criticizes Terraform’s argument as baseless, pointing out its reliance on questionable social media posts and underlining that the time period Terraform is interested in is not relevant.

You might also like: Do Kwon fights SEC summons over Terra ecosystem collapse

Citadel argues that Terraform’s legal move is just an attempt to shift blame away from itself, especially given the ongoing legal troubles Terraform is facing with the SEC and its former CEO, Do Kwon.

Citadel insists that it barely had anything to do with the cryptocurrencies in question, with its involvement totaling just $0.13 across two test transactions. This, Citadel says, clears it of any blame in the UST incident.

Additionally, Citadel claims to have given Terraform all the information it needed, showing that it did not really trade in the cryptocurrencies involved.

However, to fully understand this situation, we need to look at both sides. Citadel’s quick dismissal of the social media posts as ridiculous raises questions about what kind of evidence is needed in such complex cases.

While it’s important to avoid getting caught up in baseless conspiracy theories, we also need to make sure all possible leads are looked into, especially when the stability of digital currencies is at risk.

Citadel’s request for the court to punish Terraform adds another layer to this situation. If the court agrees, it could set a precedent that might scare other companies away from seeking legal help in similar cases, worried about having to pay a lot of money if they lose.

Read more: Terra users face domain issue amidst legal drama

Source