🌎 South Korea Supreme Court Rules on TerraUSD and LUNA

TerraUSD and LUNA Not Considered Financial Investment Products, Rules South Korea’s Supreme Court

South Korea’s Supreme Court has upheld lower court decisions, stating that TerraUSD and LUNA do not meet the criteria for financial investment products under the country’s Capital Markets Act.

Rejecting Prosecution Appeal

The court rejected prosecutors’ request to seize assets from Terraform Labs co-founder Shin Hyun-seong on January 23, citing that the lower court’s decision is valid based on related law and records. Prosecutors had argued that LUNA was a security, attempting to confiscate Shin’s assets and claiming he made illegal profits.

However, courts have consistently ruled that LUNA does not meet the legal definition of a security or financial investment product. Lawyer Kim Jung-chul from Law Firm Woori noted that the ruling not only dismisses LUNA’s security status but also confirms that the Capital Markets Act does not apply, making asset seizure based on that law impossible.

Fraud Charges Still Pending

Despite the ruling, Shin and other Terraform executives still face fraud charges. Prosecutors allege that they misled investors and manipulated the market to profit from the Terra blockchain.

Do Kwon, the key figure behind Terra, was extradited from Montenegro and appeared in a Manhattan court in January on federal fraud charges. A U.S. grand jury indicted Kwon for inflating Terraform’s crypto prices and laundering funds. The collapse of Terra in May 2022 resulted in significant losses for investors worldwide, with over $40 billion wiped out.