- LUNA (now LUNC) should not be considered a security, according to the Seoul Southern District Court.
- “It is difficult to see Luna Coin as a financial investment product regulated by the Capital Markets Act,” the court said.
- Previous courts have used careful terminology when discussing the regulatory status of LUNA.
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Terra’s native cryptocurrency, LUNC, has been deemed not a security by the Seoul Southern District Court in a court case involving former Terraform Labs co-CEO Hyun-seong Shin.
Not Regulated by the Capital Markets Act
South Korean authorities are advancing their regulatory classification of cryptocurrencies.
According to a local news outlet Ilya Shinmun, the Seoul Southern District Court claimed that Terra’s native cryptocurrency, LUNC (formerly LUNA), should not be considered a security. “It is difficult to see Luna Coin as a financial investment product regulated by the Capital Markets Act,” the court said in a case involving former Terraform Labs co-CEO Hyun-seong Shin.
To date, the Southern District Courts have floated relatively cautious terminology in discussing the regulatory status of LUNA, using the phrases “there is room for dispute of legal principles” and “it is questionable whether the Capital Market Act can be used [to LUNA]”. Ilyo Shinmun, however, reports that the latest decision uses an expression that completely rejects the possibility that LUNA is regulated as a security.
The court also strongly rejected an appeal by prosecutors against an earlier decision to dismiss the confiscation request for Shin’s assets. The prosecution initially requested the confiscation of Shin’s property—most of which consisted of real-estate spread throughout South Korea—on the grounds that the property itself was acquired as a result of criminal activity. The court dismissed the request for confiscation by reasoning that “it is difficult to see that the property is subject to acquisition. [was] a property derived from a crime or a property derived from it.”
On Friday, Terra frontman Do Kwon filed to dismiss the charges brought against him by the United States Securities and Exchange Commission, arguing that the US regulatory agency lacked jurisdiction to sue him. Kwon is currently detained in Montenegro, where he faces charges of document forgery. The United States and South Korea have expressed their intention to extradite him for prosecution.
Disclosure: At the time of writing, the author of this piece owns BTC, ETH, and other crypto assets.