'Terra-Luna Incident' Raises Attention on the Determination of Cryptocurrency as Securities
With the extradition of Han Chang-joon, former CEO of Chai Corporation, who is considered central to the 'Terra-Luna incident,' the prosecution’s investigation is expected to gain momentum. The industry is paying close attention to whether this will accelerate the determination of the securities nature of virtual assets.
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The virtual asset industry is watching closely as the prosecution’s investigation picks up speed, speculating that the judgment on the securities nature of Terra and Luna may also progress. The prosecution has charged Shin and others with violations of the Capital Markets Act, classifying Terra and Luna as investment contract securities under the law, but the final judgment will be made by the court.
Legal experts view the Terra-Luna trial as the starting point for determining the securities nature of virtual assets in Korea. The key issue is whether the promises made to investors regarding TerraUSD, an algorithmic stablecoin issued by Terraform Labs, and Luna Coin, used to maintain its value, constitute an investment contract.
Hyeonsu “Elliot” Jin, Managing partner at Decent Law Firm, specializing in virtual assets, said, “There is a high possibility that fraud charges under the Special Economic Crimes Act will be recognized. The issue lies in whether there was a violation of the Capital Markets Act,” adding, “Regardless of punishment, this could be the starting point for determining the securities nature of virtual assets.”
