South Korean Court Classifies That 'LUNC Is Not a Security'

The US Securities and Exchange Commission differed with the Korean Court’s finding of not recognizing LUNC as security.
Do Kwon is facing fraud charges in Montenegro for using a counterfeit passport and driving license.

A South Korean court ruled in its decision that the native token of Terra Network LUNA, now renamed LUNC is not a security. In its decision made in February, the South Korean Court stated that it is challenging to identify LUNC as a financial investment product that The Capital Market regulates.” The Court made some decisions in November 2022, but the local media organization did not disclose them.

The decision clarified that the South Korean prosecutors could not seize any digital assets belonging to the co-founder of LUNC, Daniel Shin aka. Shin Hyun Seung. Prosecutors reportedly sought more than $100 million in Shin’s assets in November for his role in the collapse of the Terra ecosystem. The properties must be restored to the victims of the Terra collapse, so the Court has apparently rejected the confiscation petition.

On March 24, 2023, TheCoinepublic reported that the Do Kwon co-founder and CEO of collapsed Terraform labs was detained by police officials at Podgorica airport in Montenegro. He was wanted in South Korea and Singapore on fraud charges amid several other allegations. In Montenegro, Kwon is charged for using forged documents, including a passport and a driving license.

The arrested TerraUSD founder has invested in 15+ companies, including Fractal, Jambo, Aperture, Seashell, Pstake, Klaycity, and many others. The founder of TerraUSD was classified as one of the wealthiest gaming entrepreneurs by Forbes in 2019 and was the wealthiest crypto enthusiast in Korea.

The US authorities disagreed with the South Korean Court’s decision to identify LUNC, not as security. Earlier in 2022 Securities and Exchange Commission of the US filed a case against Kwon for his role and involvement in the failure of the LUNC token. Moreover, the SEC earlier identified LUNC as crypto asset security.

Kwon is also accused of secretly transferring 9 billion won to a law firm based in South Korea. A local media organization KBS News reported that the amount transferred by Terra’s co-founder was deposited in Kim & Chang’s bank account.

Transferring funds right before the company’s collapse allegedly suggests that Kwon knew that his foundation would die and its time was close (two-three days.) The co-founder claims to have moved the funds to the law firm to deal with approaching legal problems after the failure. Kwon was on the radar of the United States, Singapore, and South Korean authorities. The charges against Kwon in these countries were fraud, market manipulation, commodities fraud, securities fraud, and conspiracy to defraud.

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing