Prosecution’s Appeal for Property Confiscation Denied
The Seoul southern district court dismissed the prosecution’s appeal for the confiscation of Shin’s assets and his arrest on the grounds of securities law violations. The prosecution contended that fraudulent transactions involving LUNA breached the Capital Market Act, in addition to constituting property-related crimes, which could warrant asset confiscation.
Court Deems LUNA Not a Financial Investment Product
According to a translated version of the court’s statement, it was determined that “it is difficult to see Luna Coin as a financial investment product regulated by the Capital Markets Act.” The court also refused the prosecution’s request to confiscate the accused’s assets, asserting that it is hard to establish that the property in question was “acquired by a crime or an asset derived from it.”
Landmark Ruling Clarifies LUNA’s Legal Status
This latest ruling is particularly significant because it unambiguously declares that LUNA is not a security. In contrast, previous court rulings have employed cautious language, such as “there is room for dispute in terms of the law” and “it is questionable whether the Capital Market Act can be applied.”
Former CEO’s Legal Representation Comments on the Case
The attorney representing Shin highlighted that the court rejected the prosecution’s requests for arrest warrants for his client and other individuals involved in the case. He also emphasized that, based on the court’s decision, LUNA cannot easily be classified as an investment product.
Terra-LUNA Case: Fraud and Breach of Trust, not Capital Markets Act Violation
With this recent court decision, the Terra-LUNA case shifts from a focus on Capital Markets Act violations to matters of fraud and breach of trust. Nevertheless, the prosecution remains intent on investigating the securities aspect of the native token and has appealed the district court’s verdict to the Supreme Court.
Contrasting Stance with the US Securities and Exchange Commission
The South Korean district court’s judgment contrasts with the position of the United States Securities and Exchange Commission (SEC), which has charged Terraform Labs and its founder, Do Kwon, with securities law violations. However, Kwon’s legal team has denied the SEC’s allegations of securities fraud.
What was the South Korean court’s decision regarding LUNA?
The court ruled that LUNA, the native token of the Terra ecosystem, is not a security under the nation’s Capital Markets Act.
What does the ruling mean for the Terra-LUNA case?
Following the court’s decision, the Terra-LUNA case will now focus on matters of fraud and breach of trust, rather than violations of the Capital Markets Act.
How does the South Korean court’s judgment compare to the stance of the US SEC?
While the South Korean court ruled that LUNA is not a security, the US SEC has charged Terraform Labs and its founder, Do Kwon, with securities law violations.