South Korea Court Rules LUNC Is Not a Security

A Seoul Southern District Court recently found that LUNA, now renamed LUNC, is not a financial investment product. The US SEC called LUNC a security earlier this year.

Terra Classic (LUNC), the native token of the Terra blockchain that imploded last year, has been deemed not to be a security by a South Korean Court. The ruling was made in February but only now reported by a local Korean news outlet. The reports surfaced amid allegations against Terraform Labs co-founder, Do Kwon.

The Seoul Southern District Court said in its February 16 ruling:

It is difficult to see LUNC as a financial investment product regulated by The Capital Markets Act.

The District Court delivered an initial ruling on November 15, but the Korean press has only now revealed both judgments. The latest ruling, however, is the first time the court explicitly ruled that LUNC is not a security.

This opposes its previous directive, which said, “there is room for dispute in terms of the law” and “it is questionable whether the Capital Market Act can be applied.”

The court further contended that the South Korean officials from the Seoul prosecutor’s office might not seize Terra co-founder Daniel Shin’s crypto assets. The court’s decision may be a welcome relief for Do Kwon, who is currently in custody in Montenegro after he was charged by the SEC with multibillion-dollar fraud in February.

Kwon will appear before a court in Montenegro concerning his arrest, where authorities charged him with falsifying documents when attempting to flee to Dubai. Kwon was arrested with Terraform Labs’ chief financial officer, Han Chang-Joon.

Kwon is a wanted fugitive in various jurisdictions, including the US and South Korea, where he faces a myriad of charges, including fraud. All charges relate to the collapse of the $40 billion Terra Luna stablecoin and crypto ecosystem, which sent the broader crypto market into a downward spiral in 2022.

Both the US and South Korea are seeking the extradition of Kwon. South Korean authorities charged him with violating its Capital Markets Act. Federal prosecutors in the US have indicted Kwon on two counts of securities fraud, wire fraud, commodities fraud, and conspiracy.

Kwon denies all charges against him.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.