Terraform Labs CEO Chris Amani has claimed that short sellers used accounts associated with FTX to execute significant sell orders at the start of the UST attack.
According to court documents dated July 19, Terraform Labs (TFL), the developer of the failed Terra blockchain, is seeking relevant documents from bankrupt FTX to defend itself against the lawsuit filed by the United States Securities and Exchange Commission (SEC).
In February, the SEC accused the blockchain developer and former CEO, Do Kwon, of engaging in fraudulent activities and market manipulation that led to the collapse of Terra/LUNA tokens.
However, the company has consistently argued that the depeg of Terra USD (UST), as well as a coordinated “short” attack by third parties on the stablecoin and its ecosystem, resulted in approximately $40 billion in losses.
To substantiate its claim, Terra blockchain developer wants FTX, the crypto exchange, to provide documents containing “large-volume cryptocurrency sales/offers,” including those related to UST and LUNA. Specifically, the company is seeking documents related to Jump Trading’s transactions involving UST and LUNA between May 2021 and May 2022, as well as transaction accounts and wallets of other short sellers between March 2022 and May 2022.
“This evidence is in the Debtors’ possession, custody, and-or control. TFL seeks information from the centralized FTX International and US Exchanges about wallets used by Jump Trading LLC to trade UST or LUNA on these exchanges.”
The new CEO of TFL, Chris Amani, also submitted a supportive affidavit stating that the publicly disclosed order book information showed significant sell orders being placed using accounts associated with FTX at the beginning of the UST attack by short sellers. Amani added:
“Publicly availably blockchain data also shows that wallets identified as involved in the attack transferred the proceeds of their sales of UST to FTX exchange deposit wallets.”
As a result, TFL is requesting the authority to demand documentation from FTX International and its U.S. subsidiary, FTX US. If the request is accepted, the company is demanding an immediate release of these documents, as the trial is set to begin no later than November 30th.
