A South Korean District Court has determined that LUNA, the native token of Terra ecosystem, is not a security.
The court has also rejected prosecutors’ plea to seize assets belonging to Shin Hyun-Seong, co-founder of Terraform Labs based in Singapore, and detain him together with other executives of the project.
LUNA Not Classified as Security Token
As reported by local media outlet ilyo on 24th April, Seoul Southern District Court has stated that LUNA is definitely not considered a security. In its verdict, the court stated that “It is tough to view LUNA Coin as a financial investment product regulated by the Capital Markets Act.”
This latest ruling is noteworthy, as other courts have not clearly decided whether LUNA is a securities token or not.
Additionally, the court has rejected several applications from prosecutors to issue an arrest warrant for Terraform Lab’s co-founder and other executives. Shin’s lawyer reported that the Court also dismissed the prosecution’s plea to seize Shin’s assets, citing, “It is not easy to see that the property is acquired from a crime or an asset derived from it.”
As previously covered by CryptoPotato, Shin Hyun-Seong was questioned at the Seoul District Court regarding his engagement in the shutdown of LUNA and algorithmic stablecoin UST, causing a total loss of $40 billion for users.
According to South Korean authorities, Shin allegedly violated the Capital Markets Act and the Electronic Financial Transactions Act, along with other offenses. However, Shin claimed that he departed Terraform Labs two years ahead of the LUNA/UST downfall in 2022.
Undecided Outcome of Do Kwon’s Fate
Even though LUNA is not perceived as a security according to the South Korean District Court, regulators in the United States are suing Terraform Labs and co-founder Do Kwon for securities violation. As mentioned in a lawsuit by Securities Exchange Commission (SEC), both parties offered and sold unregistered securities via crypto.
Meanwhile, Do Kwon, who reportedly evaded authorities, was captured in Montenegro. There were also reports that Kwon transferred around $7 million to a law company prior to Terra collapse.
