South Korea’s Supreme Court docket has sided with decrease courts in deciding that TerraUSD and LUNA don’t meet the standards for monetary funding merchandise.
Korea‘s Supreme Court docket has dominated that the collapsed stablecoin TerraUSD (USTC) and its sister token Terra (LUNA) will not be monetary funding merchandise, rejecting a prosecution enchantment and upholding earlier choices, Korean newspaper Etoday reviews.
On Jan. 23, the court docket rejected prosecutors’ request to grab belongings from Terraform Labs co-founder Shin Hyun-seong. The court docket agreed with decrease courts that had already dominated LUNA doesn’t qualify as a regulated monetary product beneath Korea’s Capital Markets Act, stating that “associated regulation and data present the decrease court docket’s resolution is legitimate.”
Prosecutors argued that LUNA was some kind of safety and tried to confiscate Shin’s belongings, claiming he made unlawful income. But, courts have repeatedly dominated that LUNA doesn’t meet the authorized definition of a safety or monetary funding product.
Capital Markets Act doesn’t apply
Lawyer Kim Jung-chul from Regulation Agency Woori stated the ruling doesn’t simply dismiss LUNA’s safety standing, but in addition “confirms that the Capital Markets Act doesn’t apply, that means asset seizure based mostly on that regulation just isn’t doable.”
Regardless of the ruling, Shin and different Terraform executives nonetheless face fraud fees. Prosecutors say they misled traders and manipulated the market to revenue from the Terra blockchain.
Do Kwon, the important thing determine behind Terra, was extradited from Montenegro and appeared in a Manhattan court docket in January on federal fraud fees. A U.S. grand jury indicted Kwon for inflating Terraform’s crypto costs and laundering funds. The collapse of Terra in Could 2022 worn out over $40 billion, inflicting main losses for traders worldwide.