South Korean court says LUNA is not a security, details inside
- A District Court in Seoul has ruled that the LUNA token involved in Terra’s collapse is not a security.
- The court’s judgment is in stark contrast to the stance of the U.S. Securities and Exchange Commission.
A South Korean Judge has ruled that LUNA is not a security. The ruling came earlier on 24 April in the case of Hyun-seong Shin aka Daniel Shin.
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Shin co-founded Terraform Labs, the crypto firm that issued LUNA tokens. He also served as the Chief Executive Officer of the firm before its collapse last year.
Seoul Court dismisses securities violation charges against Shin
According to a report by South Korean local media, the Seoul Southern District Court has dismissed the securities violation charges brought against former Terra CEO Daniel Shin by local prosecutors.
The prosecution’s investigation charged Shin with violation of the Capital Markets Act, citing LUNA’s status as a security.
However, the District Judge has dismissed these charges while highlighting the difficulty in seeing the crypto token in question as a financial investment product regulated by the Capital Markets Act.
Speaking on the latest development, Shin’s lawyer stated,
“The Arrest Court rejected all of the prosecution’s 10 or so requests for an arrest warrant against former CEO Shin and those involved in this case, consistently ruling that there is room for dispute on whether or not the Capital Markets Act was established. “It can be seen that the court judges that it is difficult to view Luna as a financial investment product.”
In addition to denying the request for an arrest warrant, the District Judge also rejected the prosecution’s appeal to confiscate the Terraform Labs co-founder’s properties, on the grounds that it was unable to determine if the property was acquired using the proceeds of the alleged crime.
While the judge in South Korea has deemed LUNA a non-security token, law enforcement agencies in the United States have made it clear that the tokens involved in the collapse of Terra were securities.
The stance was evident in the Securities and Exchange Commission’s (SEC) complaint against Do Kwon, which accused the co-founder of violating securities law.