South Korean prosecutors investigating last year’s US$40 billion collapse of Terra-Luna are looking to submit the recent U.S. ruling on Ripple cryptocurrency to a Seoul court to prove the Luna cryptocurrency as financial securities, the Seoul Southern District Prosecutor’s Office confirmed with Forkast.

See related article: After U.S. court rules Ripple XRP is not a security, industry remains cautious

Fast facts

  • The Seoul Southern District Prosecutor’s Office recently received a translated version of the ruling on the U.S. Securities and Exchange Commission’s lawsuit against Ripple Labs on the sale of XRP cryptocurrency, a spokesperson for the prosecutor’s office told Forkast via text message on Tuesday.
  • Seoul prosecutors plan to submit the XRP ruling to the local court to prove Terraform Labs’ Luna cryptocurrency as financial securities. Prosecutors accuse Terraform Labs co-founders Kwon Do-hyeong and Shin Hyun-seung of multiple charges including fraud and unregistered offerings of financial securities.
  • On July 13, the U.S. Court for the Southern District of New York ruled that Ripple Labs’ programmatic sales of the XRP cryptocurrency did not qualify as the offer and sale of financial securities. However, the court concluded that Ripple’s institutional sales of XRP constituted the unregistered offer and sale of securities.
  • Dan Sung-han, the director of Seoul Southern District’s joint financial crimes team, said that the latter part of the ruling can be utilized for the benefit of proving Terra’s offerings of Luna cryptocurrency as a breach of securities regulations, according to a Monday report by local news outlet Maeil Business News.
  • Meanwhile, Terra co-founder Kwon is currently detained in Montenegro for attempting to travel with forged passports, while a Seoul court held the first preliminary hearing for Shin and seven ex-Terra employees on July 10.
  • Kwon is also wanted in the U.S. under similar charges of fraud, securities law violations and several others related to the collapse. He has said that the charges against him were baseless and politically motivated.

See related article: Seoul prosecutors chasing Do Kwon establish crypto investigations team