Who Initiated UST Depeg and $40 Billion LUNC Collapse Revealed

In a shocking turn of events, the collapse of the Terra ecosystem has taken a fresh twist as Terraform Labs blames Citadel Securities for the depegging of its UST stablecoin.

Terraform Labs has filed a motion with the U.S. District Court for the Southern District of Florida, alleging that Citadel Securities launched a calculated and deliberate campaign to short-sell UST, resulting in its detachment from its dollar-pegged value.

The motion puts forth a compelling piece of evidence such as a screenshot from a Discord chat. The screenshot features an individual trading under an alias claiming to have had a conversation with Citadel CEO Ken Griffin, where they discussed plans to short the UST stablecoin.

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Griffin allegedly said, “They were going to Soros the f*** out of Luna UST,” a nod to the notorious trading strategies employed by George Soros, involving highly leveraged one-way bets.

Citadel Securities, for its part, had previously denied any involvement in trading UST back in May 2022. However, Terraform Labs argues that the evidence presented strongly suggests the company’s complicity in the de-pegging scandal.

This motion is an integral part of the ongoing lawsuit between Terraform Labs and its co-founder, Do Kwon, who faces accusations of fraud and negligence in relation to the Terra ecosystem’s downfall.

Should Terraform Labs manage to substantiate its allegations against Citadel Securities, it could have far-reaching implications for the lawsuit. Moreover, it would inevitably raise crucial questions about the role and conduct of major financial institutions within the cryptocurrency market.

Read Also: LUNC and USTC to $1? Terra Classic Community Officially Passes Proposal to Burn 800M USTC

Implications of the Allegations

For investors, this revelation triggers understandable concerns about the integrity and fair practices of large financial institutions operating in the crypto market. It serves as a stark reminder of the importance of conducting due diligence before venturing into any cryptocurrency investment.

Regulators, too, find themselves confronted with complex challenges concerning the oversight and governance of the decentralized cryptocurrency market. The allegations brought forth against Citadel Securities highlight the need for enhanced regulatory scrutiny and a deeper understanding of the market dynamics at play.

While the veracity of Terraform Labs’ allegations against Citadel Securities remains unproven, their potential ramifications for the crypto market are too significant to ignore. It is imperative to remember that, at this stage, these allegations are yet to be substantiated, and Citadel Securities vehemently denies any wrongdoing.

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