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Terraform Labs requests to subpoena docs from bankrupt FTX in SEC case defense
Terraform Labs CEO Chris Amani alleged that short sellers used FTX-related accounts to submit massive sell orders at the beginning of the attack on UST.
2 min read
Updated: Jul. 21, 2023 at 5:46 pm UTC
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Terraform Labs (TFL), the developer of the failed Terra blockchain, wants to subpoena bankrupt FTX for relevant documents it could use to defend its case against the U.S. Securities and Exchange Commission (SEC), according to a July 19 court filing.
In February, the SEC sued the blockchain developer and its former CEO, Do Kwon, alleging that their fraudulent activities and market manipulation led to the collapse of Terra/LUNA tokens.
However, the firm has consistently maintained that the Terra USD (UST) depeg was caused by a “coordinated ‘short’ attack by third parties” who targeted the stablecoin and its ecosystem, causing around $40 billion in losses.
To prove its case, the Terra blockchain developer wants FTX to provide documents showing wallet addresses, trading accounts, and records of transactions involving the “sales/offers of large volumes of cryptocurrencies” it developed, including UST and LUNA.
The firm specifically stated that it wants FTX to release Jump Trading wallets showing its trades of UST and LUNA between May 1 and May 31, 2021, and May 1 to May 31, 2022. Additionally, it wants the bankrupt firm to produce other short sellers’ trading accounts and wallets between March 1 to May 31, 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.”
Chris Amani, TFL’s new CEO, also filed a supporting motion arguing that publicly available order book information showed that short sellers used FTX-related accounts to submit massive sell orders at the beginning of the attack on UST. 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 wants the Bankruptcy Court to allow it to subpoena documents from FTX International and its U.S. subsidiary, FTX US. If granted, the firm wants the immediate release of these documents because its trial would begin by November 30.
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In this article
Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems.
Terra Classic
$0.00011
Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems.
Terraform Labs
Terraform Labs is a startup that created Terra, a blockchain protocol and payment platform used for algorithmic stablecoins.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Do Kwon began his professional journey as an engineer, contributing to tech giants Apple and Microsoft.
Chris Amani is the new CEO of Terraform Labs, Terra and Luna creator.