LUNA is not a security, South Korean court rules in Terra co-founder’s case

A South Korean district court has dismissed security breach charges against former Terraform Labs CEO and co-founder Hyun-seong Shin. The court considered LUNA (LUNA), the native token of the LUNA ecosystem, to be non-security under South Korea’s capital market law.

The Seoul Southern District Court dismissed the prosecution’s appeal against Shin’s property confiscation and arrest for violating the Securities and Exchange Act. Prosecutors argued that Luna’s illegal dealings violated capital market laws and could result in property confiscation, in addition to property-related crimes (fraud), local daily reported. report.

A Google-translated version of the court’s opinion reads:

“It is difficult to consider Lunacoin as a financial investment product regulated by the Capital Market Law.”

While denying the prosecution’s request for the confiscation of the defendant’s property, the court noted that it would be difficult to establish that the claimed property was “acquired by the crime or assets derived therefrom.”

This ruling is all the more notable because it clearly states that Luna is not a security. Other courts have used cautious language, such as “legally open to dispute” and “doubtful whether capital market laws apply”.

Former CEO Representation Attorney Said The court denied the prosecution’s request for arrest warrants for his client and the individuals involved in the case.

Related: Do Kwon’s Lawyer Received $7 Million Before Terra Collapse: Report

A recent court ruling makes the Terra-LUNA saga a case of fraud and breach of trust rather than a violation of capital market law. However, the prosecution remains focused on the security aspects of native tokens and has appealed the lower district court’s ruling to the Supreme Court.

The Korean District Court’s ruling contrasts with the US Securities and Exchange Commission’s indictment of Terraform Labs and its founder, Do Kwon, for violating securities laws. However, Kwon’s attorneys deny the SEC securities fraud allegations.

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