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South Korea’s Supreme Court has sided with lower courts in deciding that TerraUSD and LUNA do not meet the criteria for financial investment products.
<a href="https://crypto.news/tag/south-korea/" target="_blank" rel="noopener noreferrer nofollow">Korea</a>‘s Supreme Court has ruled that the collapsed stablecoin TerraUSD (<a href="https://crypto.news/price/terraclassicusd/" target="_blank" rel="noopener noreferrer nofollow">USTC</a>) and its sister token Terra (<a href="https://crypto.news/price/terra/" target="_blank" rel="noopener noreferrer nofollow">LUNA</a>) are not financial investment products, rejecting a prosecution appeal and upholding earlier decisions, Korean newspaper Etoday <a href="https://www.etoday.co.kr/news/view/2446337" target="_blank" rel="noopener noreferrer nofollow">reports</a>.
On Jan. 23, the court rejected prosecutors’ request to seize assets from <a href="https://crypto.news/tag/terraform-labs/" target="_blank" rel="noopener noreferrer nofollow">Terraform Labs</a> co-founder Shin Hyun-seong. The court agreed with lower courts that had already ruled LUNA does not qualify as a regulated financial product under Korea’s Capital Markets Act, stating that “related law and records show the lower court’s decision is valid.”
Prosecutors argued that LUNA was some sort of security and tried to confiscate Shin’s assets, claiming he made illegal profits. Yet, courts have repeatedly ruled that LUNA does not meet the legal definition of a security or financial investment product.
You might also like: <a href="https://crypto.news/thorchain-eerily-similar-to-terra-luna-implosion-osmosis-co-founder/" rel="noopener noreferrer nofollow"> THORChain ‘eerily similar’ to Terra Luna implosion: Osmosis co-founder </a>
<h2 class="wp-block-heading" id="capital-markets-act-does-not-apply">Capital Markets Act does not apply</h2>
Lawyer Kim Jung-chul from Law Firm Woori said the ruling does not just dismiss LUNA’s security status, but also “confirms that the Capital Markets Act does not apply, meaning asset seizure based on that law is not possible.”
Despite the ruling, Shin and other Terraform executives still face fraud charges. Prosecutors say they misled investors and manipulated the market to profit from the Terra blockchain.
<a href="https://crypto.news/tag/do-kwon/" target="_blank" rel="noopener noreferrer nofollow">Do Kwon</a>, the key figure behind Terra, was <a href="https://crypto.news/do-kwon-pleads-not-guilty-in-us-court-to-fraud-charges/" target="_blank" rel="noopener noreferrer nofollow">extradited</a> 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 wiped out over $40 billion, causing major losses for investors worldwide.
Read more: <a href="https://crypto.news/lunc-price-rises-as-total-terra-classic-nears-a-403b-milestone/" rel="noopener noreferrer nofollow"> LUNC price rises as total Terra Classic nears a 403B milestone </a>

Korea’s Supreme Court rules failed TerraUSD and LUNA not financial investment products: report

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