In a judgment, the Seoul Southern District Court stated that Terra (LUNA) was not a security. It also denied the confiscation and seizure of co-founder Daniel Shin’s property.
Update April 25 09:05 UTC: Daniel Shin and nine other Terraform Labs associates have been indicted. They are facing ‘multiple charges, including violations of capital markets law.’
According to local media outlets, a South Korean court has ruled that the Terra (LUNA) token is not a security. In its judgment, the Seoul Southern District Court stated, “It is difficult to view Luna Coin as a financial investment product regulated by the Capital Markets Act.”
The prosecution was looking to have the assets of co-founder Daniel Shin (Hyun-seong) confiscated and preserved. The development is a hurdle in the case against Shin. It diverges from what other courts have said about whether Terra is security, as they have stated that there is room for dispute.
The lawyer representing Shin said of the judgment,
“The Arrest Court rejected all of the prosecution’s 10 or so requests for arrest warrants against former CEO Shin and others involved in this case, consistently ruling that there is room for dispute on whether or not the Capital Markets Act was established. It can be seen that the court judges that it is difficult to view Luna as a financial investment product.”
South Korea Rejects Arrest Warrant Requests for Daniel Shin
While Shin has been facing his own legal battles, fellow founder Do Kwon is facing several charges following his arrest. In late March, a South Korean court dismissed prosecutors’ request for an arrest warrant for Daniel Shin.
It was the second time an arrest warrant request was denied, with another denial having taken place in December 2022. Shin was interrogated in court and questioned about Kwon’s whereabouts.
Terra Co-founder Do Kwon Facing Legal Challenges
While Shin is having its own battles, all eyes are on Do Kwon. The co-founder was indicted for forging documents by prosecutors in Montenegro a few weeks after he was arrested. However, there will be a court hearing on the matter on May 11.
As for the charges laid by the United States Securities and Exchange Commission (SEC), Kwon wants the charges dismissed. The U.S. agency charged Kwon with securities fraud, but Kwon wants the case dropped over a lack of jurisdiction.
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