In May 2022, an important decision was made by the South Korean Court for Terra (LUNA), which caused a great collapse in the entire crypto money market with itself.
Seoul South Korea District Court has ruled that Luna Classic (LUNC) is a non-secure cryptocurrency, according to a report by South Korea's local news agency.
The court's decision was unexpected for prosecutors, who accused Terraform Labs co-founder Do Kwon of violating the Securities and Exchange Act, claiming LUNA is a security.
In the court decision, he stated that LUNA is a non-secure cryptocurrency, and used the following statements:
“It is difficult to view LUNA (now LUNC) as a financial investment product that can be regulated by the Capital Markets Law.
In this context, it cannot be regulated within the framework of LUNA's Capital Markets Law."
Like the court's recent LUNA decision, most other South Korean courts have ruled that cryptos cannot be examined as securities.
Despite the South Korean court's LUNA ruling, the US Securities and Exchange Commission (SEC) accused Terraform CEO Do Kwon of defrauding investors through LUNA.
The SEC also claims that the Terra ecosystem is a "crypto-asset investment contract" of the algorithmic stablecoin UST and the cryptocurrency LUNA.
In this context, he argues that Do Kwon also engages in fraud involving crypto-asset securities.
The SEC also stated in its lawsuit against Do Kwon that Do Kwon and Terraform marketed crypto-asset securities to investors to make a profit, and misled investors when marketing LUNA tokens.