- South Korean prosecutors plan to leverage the recent decision in the SEC and Ripple case against Terraforms Labs.
- A report from a local news outlet reveals that the prosecutors have obtained a translated copy of the ruling in Ripple’s case.
- The prosecutors believe the ruling of Judge Analisa Torres that Ripple is not a security unless offered to institutional investors could help prove its case against Luna.
South Korean prosecutors investigating the Terra-Luna collapse plan to use the court ruling in the SEC v Ripple case to prove the securities status of Luna. The Terra-Luna collapse, which wiped out over $40 billion, prompted many investigative actions against the company and its co-founders, Kwon Do-Hyung and Shin Hyun-Seung.
According to South Korea’s Maeil Business News, Seoul prosecutors have secured a translated copy of the Ripple case decision, which they plan to tender in court. Notably, the prosecutors believe that Judge Analisa Torres ruling that XRP itself is not categorized as a security unless sold to institutional investors would help prove its case against Terraforms Labs.
The prosecutors plan to leverage this distinction to counter claims that Luna, like XRP, cannot be considered a security under Korean law. Proving the securities status of Luna is a core part of the Terraform Labs’ lawsuit, with prosecutors accusing the co-founders Kwon Do-Hyeong and Shin Hyun-Seung of multiple charges, including fraud and unregistered offerings of financial securities.
According to Dan Sung-Han, the director of Seoul Southern District’s joint financial crimes team, the court’s ruling in Ripple’s case can prove Terra’s offerings of Luna as a breach of securities regulation. He stated further that, “in order for Ripple to be recognized as a security on a domestic basis, the right to inherit profits must be proven. It is different from Luna Coin, which promised things and received investment funds.”
The SEC’s case against Ripple, which lasted close to three years, ended last month after a ruling by the U.S. Court for the Southern District of New York. The court in the case ruled against the SEC’s claims that XRP was a security. However, the court distinguished that the cryptocurrency would only qualify as such when sold to institutional investors.
Since the decision, differing opinions have emerged, with comments from the SEC’s quarters pointing at a potential appeal. However, Ripple maintains its confidence in another victory should the regulator appeal the decision.
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