Citadel Securities, in response to a court filing from Terraform Labs earlier this month, says it had nothing to do with the 2022 depeg of the stablecoin UST.

In a filing that pushes back against a motion to compel by Terra, Citadel claimed that Terra is attempting to “deflect” from allegations that it conspired with Jump Trading to “pump up the asset prices.”

“Terraform uses a motion to compel to pursue a ridiculous conspiracy theory ‘exposing’ the purportedly hidden role of Citadel Securities in its self-imposed disaster. Not only is the time period of the request irrelevant, but the theory is baseless,” the filing said.

Terraform did not immediately respond to a request for comment.

“Its motion rests on social media, including the account of pseudonymous user ‘Gigantic Rebirth’ who posted that [Citadel Securities CEO] Ken Griffin divulged his plans over their twice monthly lunch and a ‘nice bacon rib.’ This, of course, is absurd on its face.”

Citadel asked the court to deny Terraform’s motion to compel, alleging that it only ever engaged in “two test transactions with a collective value of roughly [$0.13],” and therefore didn’t cause the depeg.

Citadel alleges that it gave Terraform discovery “showing that it did not meaningfully trade in the relevant cryptocurrencies,” making “an exploration of Citadel Securities’ trading strategies particularly unhelpful and irrelevant.”

But Citadel goes further than asking the court to toss the motion from Terraform. It also asks the court to “sanction Terraform for its spurious and harassing request” arguing that it complied with the necessary discovery, and the motion to compel was Terra acting in “bad faith.”

If the court pushes forward with sanctions, Terra could be on the hook to pay attorney’s fees and possibly even “lost earnings,” though figures of either were not disclosed.

Terraform, on Oct. 12, filed the motion to compel against Citadel Securities alleging that social media posts pointed to Citadel Securities as being behind the UST depeg. However, one of the posts mentioned also referred to Citadel’s involvement as a “rumor” and another claimed that an anonymous Discord user had lunch with Griffin.

Terraform faces legal action from the US Securities and Exchange Commission over the 2022 depeg. The SEC filed a lawsuit against Terra, and former CEO Do Kwon back in February.

Following the Ripple ruling — which saw a federal judge partially side with Ripple — Terraform tried to use the ruling to dismiss their suit back in July.

Judge Jed Rakoff, the judge overseeing the case, argued that the token sales went toward building the Terraform blockchain and therefore generated profit for all holders. That opinion seemed to be at odds with the partial ruling from Judge Analisa Torres, who is overseeing the Ripple case.

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