Terraform Labs is once again leveling allegations against market-making firm Citadel Securities. The company argues that Citadel participated in a “concerted, intentional effort” to deliberately devalue its TerraUSD (UST) stablecoin last year.

On October 10, Terraform Labs submitted a motion to the US District Court in the Southern District of Florida. The motion seeks to force Citadel Securities to release documents tied to its trading activities in May 2022, when TerraUSD plummeted in value from $1 to just $0.02.

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Terraform Labs challenges the notion that the asset’s depeg was due to algorithmic instability. The firm maintains that “certain third-party market participants” aimed to short the stablecoin, thus causing its sharp decline.

The motion also referenced public evidence suggesting that Citadel’s head, Ken Griffin, intended to short the stablecoin during the same timeframe.

A screenshot from a Discord chat mentioned a trader’s lunch meeting with Griffin, where he allegedly stated that they would “Soros the f*** out of Luna UST,” alluding to the high-risk trading strategies used by George Soros.

The motion read:

Movant contends that the market was destabilized due to the concerted, intentional effort of certain third party market participants to “short” and cause UST to depeg from its one dollar price.

For its part, Citadel Securities had previously told Forbes that it did not trade the TerraUSD stablecoin in May 2022.

The documents that Terraform Labs seeks from Citadel are vital for its ongoing legal defense against the lawsuit initiated by the US Securities and Exchange Commission (SEC) in February. The SEC accuses Terraform Labs and Do Kwon of “orchestrating a multi-billion dollar crypto asset securities fraud.”

Terraform Labs claimed in its motion:

This defense will be substantially impaired if Citadel Securities is successful in withholding this limited information.

Should the court deny Terraform’s request for Citadel to produce the trading records, the company has asked that the issue be transferred to the US District Court for the Southern District of New York for further adjudication by Judge Jed Rakoff.

Terraform Labs’ recent motion adds a new layer of complexity to its legal challenges, bringing Citadel Securities into the fray. The case, already closely monitored by the crypto community, promises to reveal more as the legal proceedings unfold.