Terraform Labs Requests FTX Data for SEC Fraud Defense


July 20, 2023


Gabriel Negrín

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Terraform Labs has asked a judge to subpoena material from FTX. The data is critical for Terraform Labs' legal defense.

In February, the SEC launched a lawsuit against Terraform Labs and its former CEO, Do Kwon. The SEC claimed in the lawsuit that they sold unregistered securities. This alleged scheme resulted in a loss of more than $40B.

Terraform's TerraUSD (UST) stablecoin and Luna (LUNA) token fell to zero in May 2022, provoking SEC criticism of its design. They claim they need the information sought from FTX to examine short sellers' trading and market actions. This analysis might help to refute the SEC's claims.

Terraform's attorneys believe it may demonstrate a "coordinated short attack," which caused the stablecoin's value to plummet. They think the sellers partially used FTX to carry out the attack.