In a stunning revelation, the recent US court ruling on XRP token, instigated by the US Securities and Exchange Commission (SEC), might stir some obstacles for South Korean prosecutors in their case against Do Kwon and Terraform Labs. The SEC, however, voiced their displeasure with the court’s decision, which declared Ripple’s XRP token “not in and of itself” a security.
The impact of this judgment could be far-reaching, particularly for South Korea where Do Kwon is under the lens of the prosecution for allegations of securities violations and fraud related to Terraform’s coin LUNC. The case is strongly intertwined with the claim that Kwon was aware of LUNC being a security. However, conflicting South Korean laws which do not classify any cryptoasset as a security, and previous national court rulings that assert LUNC cannot be considered a security, propose a complex scenario.
In an interesting twist, despite initial fears that the US ruling might impair the Terra-LUNA trial, prosecutors believe some aspects of the ruling can fortify its contention in the case. They view the court’s recognition of the XRP token being traded as a security, when sold to institutional investors, as a beneficial argument to support their assertion that LUNC falls under the same category.
As per Chief Prosecutor Dan Seong-han’s words, “The ruling recognized that the sale of [XRP] tokens by the Ripple issuer to […] institutional investors constituted the sale of unregistered securities.”Boosts of confidence in the prosecution come from additional rulings like the recent Federal Court decision in Manhattan. The verdict stated that cryptocurrency could indeed be examined “as a security” irrespective of its sales approach.
It is noteworthy that Kwon is currently serving time in Montenegro for traveling on falsified documents. Regardless of the location, his legal complications appear to be intensifying amid these evolving notions about cryptoassets and security classifications.
It’s a fine line between progressive cryptocurrency adaptation and compliance with security regulations. This dichotomy raises questions about the future of tokens like XRP and LUNC, with potential redefinition of their standing in both U.S. and South Korean judicial systems. Amidst this uncertainty, what’s clear is that the outcome of these cases can significantly impact the landscape of global cryptocurrency regulation.
Source: Cryptonews
