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The Seoul Southern District Court has made a ruling that cryptocurrency ‘Luna’ is not a security. This ruling has stopped the prosecution’s investigation into the alleged violation of the Capital Market Act by the co-founder of Terraform Labs, initial investors, and key technical personnel. The prosecution had filed seizure and attachment claims against Shin Hyun-sung, the former co-CEO of Terraform Labs, but the court rejected these claims. The court stated that Luna Coin cannot be considered a financial investment product regulated by the Capital Market Act and does not fall under investment contract securities among financial investment products.
The court’s decision is significant because it provides a definitive statement that Luna is not a security. Shin’s defense attorney argued that all judges have concluded that Luna is difficult to consider as a financial investment product. The prosecution argued that Luna’s fraudulent transactions violated the Capital Market Act, but the appellate court determined that the evidence submitted by the prosecution alone was insufficient.
The prosecution had filed seizure and attachment claims against Shin’s assets, including his residence and real estate properties. However, the court rejected the seizure claim, stating that the properties subject to the claim were not acquired through criminal activities or assets derived from them.
In South Korea, the proposed Virtual Asset Basic Law aims to hold virtual asset exchanges responsible for compensating customers in hacking incidents, enforce offline storage of customer assets, and strengthen fraud detection measures to address virtual asset hacking losses. Experts emphasize the importance of the law in penalizing unfair virtual asset transactions.
Read more: “Digital finance, economic crisis breakthrough” said Yoon Chang-hyun, a lawmaker In South Korea
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