The prosecution has submitted a ruling from a U.S. court as evidence regarding the "securities nature of coins," which is a key issue in the trial related to the "Terra·Luna incident."
On the morning of the 28th, during the trial of eight individuals including former Chai Corporation CEO Shin Hyun-sung (38) at the Seoul Southern District Court Criminal Division 14 (Presiding Judge Jang Sung-hoon), the prosecution announced that it would submit a ruling from the U.S. Southern District of New York concerning cryptocurrency securities as evidence.
There had been predictions that the ruling by the Southern District of New York in July, which did not recognize Ripple itself as a security, would negatively impact the Terra·Luna trial. However, the prosecution judged that the ruling was actually favorable evidence for the trial because it defined Ripple as a security when sold to institutional investors, unlike transactions by general investors on exchanges.
The prosecution considers Luna coin to have securities characteristics and applied charges of violating the Capital Markets Act against former CEO Shin. The basis for this is that approximately 55 billion KRW was raised through the issuance and sale of Luna coins to promote the Terra project. This is because investors bore the risk of principal loss and obtained rights to receive profits from the Terra project. This is the first domestic case of prosecution recognizing the securities nature of a coin.
The defense for former CEO Shin argued, "Unlike U.S. securities law, Korea's Capital Markets Act requires the existence of a claim right as a condition for investment contract securities," and "Since Luna does not guarantee any claim rights to holders, Luna’s nature makes it difficult to recognize it as investment contract securities under the Capital Markets Act."
On this day, the court summarized the key issues in the trial of former CEO Shin and others as ▲ whether Luna has securities characteristics ▲ whether the Terra project was falsely promoted to investors and the general public despite knowing it was unfeasible ▲ whether former CEO Shin was involved in the Luna crash incident ▲ and whether Chai Corporation’s customer information was leaked externally.
The court scheduled the third pretrial hearing for the 25th of next month.
Former CEO Shin and others were indicted in April on charges of falsely promoting the "Terra project" as a successful business despite knowing it was impossible, thereby attracting investors. The prosecution believes that Shin and others obtained approximately 462.9 billion KRW in illicit gains through this.
Former CEO Shin faces charges including fraudulent unfair trading under the Capital Markets Act, fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, conspiracy regulation violations under the Capital Markets Act, violation of the Act on the Regulation of Conducting Fund-Raising Business Without Permission, violation of the Electronic Financial Transactions Act, breach of trust and embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes, violation of the Act on Reporting and Using Specified Financial Transaction Information, and mediation of breach of trust and breach of duty.
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