Daniel Shin, co-founder of Terraform Labs, is facing fraud charges in South Korea for the sale of Terra Classic (LUNC) tokens. The prosecution argues that LUNC is a security, despite no current classification of any cryptoasset as such under South Korean law.

The case will depend on whether Shin knew LUNC was a security when he sold tokens to investors. Shin's legal team has the right to pursue the matter at a second trial in the high court and, if necessary, the Supreme Court. The SEC's classification of Terraform's LUNC and Terra coins as "cryptoasset securities" may also impact the court case, and Shin's legal team may reference a previous ruling from a Seoul court in April, which stated that LUNC was not a security.