Former Terraform Labs CEO and co-founder, Hyun-seong Shin, has been cleared of charges of violating South Korea’s Capital Markets Act by the southern district court in Seoul.
The court dismissed the prosecution’s request for confiscating Shin’s properties and his arrest based on securities law violations, deeming LUNA (the native token of the LUNA ecosystem) as a non-security under the Act.
While rejecting the prosecution’s request for confiscation of the accused’s properties, the court noted that it is difficult to see that the property subject to the claim had been “acquired by a crime or an asset derived from it.”
The ruling categorically states that Luna is not a security, making the Terra-LUNA saga a case of fraud and breach of trust rather than a violation of the Capital Markets Act.
The prosecution, however, is still focusing on the securities aspect of the native token and has appealed to the Supreme Court against the verdict of the lower district court.
The US Securities and Exchange Commission (SEC) has also charged Terraform Labs and its founder, Do Kwon, with violating securities law, which Kwon’s lawyers have denied.
