A court in South Korea has dismissed charges of non-compliance to securities laws against the former CEO of Terraform Labs, Hyun-Seong Shin. In addition, the court ruled that LUNA, the governance token of the Terra ecosystem, is a non-security under the country’s Capital Markets Act.
Korean Court Dismisses Charges Against Co-founder
According to reports, a Southern district court in Seoul has dropped the prosecution’s notion of seizing the properties of Shin and his subsequent arrest on the allegations that he violated the South Korean Securities laws. The prosecution counsel argued that the fraudulent transactions on the Luna platform breached the Capital Market Act.
However, the prosecution counsel noted that Shin committed other property frauds, making confiscating these properties part of the charges against him, as local media outlets reported. Meanwhile, the court rejected the prosecutor’s request for property confiscation, stating that it has not yet been confirmed that the properties were acquired from the proceeds of crime.
Industry observers noted that the latest court ruling is a notable event, as the Terraform court case has been dragging on for some time. An important aspect of the court’s pronouncement was that LUNA is not a security.
This pronouncement signifies another win for the fledgling digital asset market. Hence, other courts must be more cautious in classifying LUNA as security.
Nevertheless, there is room for disagreement regarding the interpretation of the law. Some also argued that it is questionable whether the Capital Markets Act can be applied in this case.
The attorney representing Terrform’s former CEO explained that the court’s dismissal of the prosecutor’s request for an arrest warrant on Shin and other individuals is the right thing to do under the law. According to the legal counsel, LUNA could no longer be deemed an investment product based on the court’s latest ruling.
A Case Of Fraud
It is worth noting that the latest court ruling indicates that the prolonged Terra-LUNA debacle is a case of fraud rather than a breach of the Capital Markets Act. Meanwhile, the prosecution team is still pushing on the securities dimension of the native token.
As a result, it has reportedly appealed the lower court ruling at the South Korean Supreme Court. Interestingly, the recent judgment by the lower district court takes a different bearing to that of the US Securities and Exchange Commission (SEC).
SEC has previously charged Terraform Labs and its creator, Do Kwon, for violating United States securities laws. As expected, the embattled former CEO’s legal team has countered the regulator’s fraud allegations against their client.
Do Kwon was arrested in March in Montenegro after attempting to exit the country using fake papers. Law enforcement agencies from the US and his native South Korea have been hot on his heels following Terraform Labs’ collapse.
Accordingly, regulators charged Do Kwon with multiple counts of running a fraudulent scheme using the now-collapsed company.
He was also accused of wire fraud, securities fraud, conspiracy to commit fraud, and market manipulation.
In addition, Terra’s co-founder Shin was arrested and charged in court over his involvement with the fraudulent investment scheme run by Do Kwon.
SureTradeGroup.com is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Some of the content on this site is paid content that is not written or posted by our writers or editors and the opinions expressed do not reflect the opinions of this website. Any disagreement you may have with brands or companies mentioned in articles will need to be taken care of directly with those specific brands and companies. The responsibility of anyone who may click links in our articles and ultimately sign up for that product or service is their own. Forex, Stocks, Cryptocurrencies, NFTs and Dogital Tokens are all a high-risk asset, investing in them can lead to losses. Readers should do their own research before taking any action.