Terraform Labs, the company responsible for the Terra/Luna collapse in 2022, is seeking subpoenas to be served to FTX Trading Ltd. by the United States Bankruptcy Court, as Terraform believes that the now-defunct exchange holds important documents relevant to their ongoing legal battle with the Securities and Exchange Commission (SEC).
The SEC, under the leadership of Gary Gensler, has targeted Terraform Labs and its former CEO, Do Kwon, accusing them of fraudulent activities and market manipulation that led to the collapse of Terra/Luna tokens and the subsequent loss of $40 billion from the cryptocurrency markets.
Despite being sued by the SEC in February, Terraform Labs argues that the depegging of Terra USD (UST) was caused by third parties who deliberately launched a “short attack” aimed at driving down the price of the stablecoin and Luna tokens, rather than by any fault or wrongdoing on Terraform’s part.
To support their case, Terraform Labs is requesting that FTX Trading Ltd. disclose the Jump Trading wallets containing records of their UST and LUNA trades during specific time periods in 2021 and 2022. Additionally, they are asking for FTX to provide information on short sellers’ accounts and wallets between March 1 and May 31, 2022.
Terraform Labs argues that the release of the requested documents is crucial for their defense and that not including this evidence would significantly damage their case. The trial between Terraform Labs and the SEC is scheduled to start on November 30. This request for subpoenas comes at the same time that the company announced its new interim CEO, Chris Amani, who expressed his vision to revitalize the company. However, specific details about the plan were not provided in an interview with the Wall Street Journal.
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