A South Korean District Court has declared that LUNA, the native token of the Terra ecosystem, is not a security.
The court also dismissed prosecutors’ requests to confiscate properties belonging to Singapore-based Terraform Labs co-founder Shin Hyun-Seong, and also arrest him along with other executives of the Singapore-based project.
The Seoul Southern District Court categorically stated that LUNA is not considered a security, according to a report by a local media outlet, ilyo on April 24. The court, in its ruling, said, “It is difficult to view LUNA Coin as a financial investment product regulated by the Capital Markets Act.”
Meanwhile, the latest ruling is notable in that other courts have not been clear on whether Luna is a securities token or not.
Also, the court rejected multiple requests from prosecutors to issue an arrest warrant for the Terraform Lab’s co-founder and other executives, as stated by Shin’s lawyer. In addition, the Southern District Court in Seoul dismissed the prosecution’s claims to confiscate Shin’s properties, stating that “it is difficult to see that the property subject to the claim is a property acquired by a crime or an asset derived from it.”
As previously reported by CryptoPotato, the Terraform Labs co-founder appeared for interrogation in the Seoul District Court regarding his involvement in the collapse of LUNA and algorithmic stablecoin UST, which resulted in losses worth $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, the former executive claimed that he left Terraform Labs two years before the LUNA/UST collapse in 2022.
While LUNA is not seen as a security, according to the South Korean District Court, regulators in the United States have sued Terraform Labs and co-founder Do Kwon for securities violation. As stated in a lawsuit by the Securities Exchange Commission (SEC), both parties offered and sold unregistered securities through crypto.
Do Kwon, on the other hand, who has been reportedly evading authorities, was arrested in Montenegro. There were also reports that Kwon transferred approximately $7 million to a law firm before Terra’s crash.