South Korean Court Determines Terra Classic (LUNC) Is Not a Security

• Prosecutors reportedly aimed to seize over $100 million in Shin’s assets in November.
• U.S. officials contest the Korean court’s conclusion that LUNC is not classified as a security.

The South Korean Court has ruled that Terra Classic (LUNC), the renamed native token of the Terra network that experienced a significant collapse last year, is not categorized as a security.

According to reports, the Seoul Southern District Court reiterated on February 16 that “it is challenging to regard LUNC as a financial investment product governed by The Capital Markets Act,” as stated by the local news outlet Ilyo Shinmun today. The court reached its decision on November 15; however, the news organization did not disclose either ruling until today.

The report indicates that the court’s ruling implies that South Korean prosecutors will be unable to seize any assets belonging to Shin Hyun-Seung (also known as Daniel Shin).

U.S Regulators Disagree

In connection with the downfall of the Terra ecosystem, prosecutors reportedly sought to confiscate over $100 million in Shin’s assets in November. These assets are intended to be returned to the victims of the Terra collapse, leading the court to deny the forfeiture request.

Prosecutors have made two attempts to obtain a ruling from the Supreme Court of Korea (on March 20 and April 14), but the court has not yet issued a decision. Meanwhile, Terraform Labs co-founder Do Kwon was apprehended earlier in Montenegro and faces charges of document forgery. Both U.S. and South Korean authorities have requested his extradition.

U.S. officials disagree with the Korean court’s determination that LUNC is not a security. Earlier this year, the U.S. Securities and Exchange Commission (SEC) initiated a lawsuit against Terraform Labs and its co-founder, Do Kwon, for their involvement in the collapse of the Terra tokens. Previously, LUNC was classified as a crypto asset security by the SEC.