A new Justice Department memo narrowing cryptocurrency enforcement priorities will not change the criminal case against Terraform Labs co-founder and former CEO Do Kwon, U.S. prosecutors confirmed. The internal DOJ memo, released Monday by Assistant Attorney General Todd Blanche, directed staff to halt prosecutions involving crypto exchanges, mixing services and offline wallets for actions taken by end users. It also recommended against pursuing criminal charges under securities or commodities laws unless alternative charges are available and litigation over a token’s legal status cannot be avoided. But at a hearing today before U.S. District Judge Paul Engelmayer in the Southern District of New York, prosecutors said the guidelines had no impact on the current charges against Kwon. Kwon faces nine charges in total, including commodities and securities fraud, as well as wire fraud and conspiracy to defraud. Prosecutors told Judge Engelmayer they have “no plans” to modify or drop any of the charges at this time. Related News: BREAKING: Coinbase Has A Wave Of Listings This Evening - They Are Listing the Altcoin That Dropped By Half Today Kwon’s attorney, David Patton of Hecker Fink LLP, said the memo may not directly affect the charges but could be relevant in shaping upcoming pretrial motions. “I think that could potentially be the subject of some pretrial motions,” Patton said, particularly regarding the classification of the digital assets in question as securities. In a related civil lawsuit filed by the U.S. Securities and Exchange Commission, a separate SDNY judge had previously ruled that the tokens in question were securities and found Kwon and Terraform Labs liable for fraud. Today, Judge Engelmayer instructed both parties to notify him in advance if they wish to invoke the findings in the SEC case during the criminal trial. The next set of pretrial motions is expected in July, while the third status conference is scheduled for June 12. Due to scheduling conflicts, Kwon's sentencing hearing was postponed from January 26, 2026, to February 17, 2026. *This is not investment advice. Continue Reading: Will the Justice Department’s “Stop Cryptocurrency Operations” Order Benefit Terra (LUNA) Case and Do Kwon? Prosecutors Made a Statement
