Terraform Labs, the firm behind the collapsed Terra ecosystem, has filed a motion to subpoena information from the bankrupt crypto exchange FTX. The company claimed that FTX's sister company Alameda Research was behind a coordinated attack by short sellers to pave the way for the failure of Terra ecosystem tokens. The company said the requested documents would help Terraform Labs defend itself against the fraud charges brought by the U.S. Securities and Exchange Commission (SEC). - In February, the SEC accused Terraform Labs and its former CEO, Do Kwon, of illegally offering unregistered securities in a fraud scheme.
- Terraform Labs requested FTX to present information about digital wallets used by short sellers from March to May 2022.
- Other requests include FTX's records about wallets, trading accounts, and assets used to trade Terraform Labs' cryptocurrencies on the exchange, the information on the sales of those tokens in large volumes, the data on the balances and holdings in the suspicious short sellers' wallets and trading accounts, and the identities of those wallet owners and controllers.
- The firm's lawyers also demanded information on the wallets used by Jump Trading LLC, accused by the SEC of helping Terraform Labs prop up the ecosystem tokens TerraUSD and Luna.
The multibillion-dollar Terra ecosystem collapsed last year after its native token Luna's price plummeted nearly to zero in May, and lost all its value against the U.S. dollar (USD), triggering a prolonged crypto winter. - The collapse caused over $60B to be wiped off the crypto market.
- Terraform Labs recently appointed Chris Amani as its new interim CEO to replace Do Kwon, who currently deals with legal proceedings and charges stemming from the collapse.
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