The South Korean Supreme Court has upheld that the cryptocurrencies TerraUSD and LUNA are not financial investment products, supporting lower courts' decisions.
Supreme Court Decision in South Korea
On January 23, the Supreme Court denied prosecutors' request to seize assets from Terraform Labs co-founder Shin Hyun-seong, declaring that LUNA does not qualify as a regulated financial product under Korea's Capital Markets Act. Prosecutors argued that LUNA was a security and tried to confiscate assets, claiming illegal profits. However, courts have repeatedly ruled that LUNA does not meet the legal definition of a security or financial investment product.
Capital Markets Act Does Not Apply
Lawyer Kim Jung-chul from Law Firm Woori stated that the ruling not only dismisses 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.
Ongoing Fraud Charges
Despite the ruling, Shin and other Terraform executives still face fraud charges. Prosecutors claim they misled investors and manipulated the market to profit from the Terra blockchain. Do Kwon, a key figure behind Terra, was extradited from Montenegro and appeared in a Manhattan court facing federal fraud charges.
The Supreme Court's decision holds significant implications for the legal status of cryptocurrencies in South Korea, although fraud charges for key project figures remain ongoing.
