Is Crypto a Security? South Korean Courts Can’t Decide – and It’s Causing Legal Backlogs
“Is crypto a security?”– South Korean courts cannot seem to decide on the answer, and a new report claims the conundrum is causing a legal backlog.
Per Newsis, individual judges at the Seoul Southern District Court are finding themselves drawn into debates about whether certain coins can be considered to have “security properties.”
The Seoul Southern District Court is handling two of the highest-profile altcoin “price manipulation” cases in South Korean legal history.
The court is now handling various cases relating to the Terra ecosystem crash of May 2022, as well as the art-themed Pica Coin token.
Both cases hinge on prosecution allegations that the coins were knowingly sold as securities.
Currently, South Korean law does not recognize any coin as having security status. However, judges have been pressured to accept precedents from the US.
Washington-based regulators have declared that some coins can be considered securities. They say others have commodity properties.
Terraform Labs, the firm behind Terra ecosystem coins like LUNC (formerly LUNA), has based much of its South Korean case around the notion that cryptoassets are not securities.
However, judges at the Seoul Southern District Court “have repeatedly agonized over judgments” on this matter. Newsis wrote:
“‘Is crypto a security?’ Seoul Southern District Court judges ask this question during every trial.”
A judge from the same court sentenced a former crypto exchange executive to four years in prison on February 15.
The latter was found guilty of securing a low-cap altcoin listing to drive up prices. However, in sentencing, the judge struck an exasperated note, stating:
“It is difficult to clearly recognize the illegality of the act. That is because there are no clear
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