Seoul Prosecutor’s Office to use Ripple case decision in Terra-Luna lawsuit

Ripple vs. SEC: the court grants the petitions of both parties

South Korean prosecutors investigating Terra-Luna crash plan to use court ruling in case SEC against Rippleto prove the security status of the Luna token. The collapse of Terra-Luna, which destroyed more than $40 billion, sparked criminal prosecutions against the company and its co-founders Kwon Do-hyun and Shin Hyun-seung.

According to the South Korean edition of Maeil Business News, the Seoul prosecutor’s office received a translated copy of the decision in the Ripple case, which they plan to present in court. Notably, prosecutors believe Judge Analissa Torres’ ruling that XRP itself is not classified as a security unless it is sold to institutional investors will help prove him right against Terraforms Labs.

Prosecutors plan to use this distinction to refute claims that Luna, like XRP, cannot be considered a security under Korean law. Proving Luna’s securities status is a major part of the Terraform Labs lawsuit, with prosecutors charging co-founders Kwon Do Hyun and Shin Hyun Seung with numerous charges, including fraud and unregistered securities offerings.

According to Dan Sung-Han, director of the Seoul Southern District Joint Financial Crime Enforcement Group, the Ripple court ruling could prove that Terra’s Luna offerings are a violation of securities regulation. He further stated that “In order for Ripple to be recognized as a security on an internal basis, the right to inherit profits must be proven. It is different from Luna Coin, which promised something and received investment funds.”

Since the decision in the SEC v. Ripple case, where XRP retail sales were not recognized as an offering of securities, opinions have been mixed, with comments from SEC officials pointing to a possible appeal. However, Ripple remains confident of another victory if the regulator appeals this decision.

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