New York, NY – A recent staff memo of the US Ministry of Justice, driving the Crypto unit of the Doj and reducing the scope of its application priorities linked to the crypto will have no impact on co -founder prosecution and former CEO of Terraform Labs, Do Kwon, prosecutors announced on Thursday.
The memo, sent Monday evening by the US sub-procurer Todd Blanche, informed the staff that the DoJ would no longer pursue prosecution against crypto exchanges, mixing services or offline wallets for the acts of their end users. Blanche told staff not to charm the violations of federal laws on securities or raw materials, except in specific circumstances, in cases where the accusations “would require the [DOJ] To plead whether a digital asset is a “security” or a “goods” “and that there is an adequate alternative criminal accusation.
During a hearing Thursday, the judge of the American district court Paul Engelmayer, of the South District of New York (SDNY), asked prosecutors if the note of the Blanche’s note would have an impact on the accusations against Kwon, which includes two chiefs of fraud on basic products and two charges of fraud in securities, as well as five other accusations, including thread frauds and plots fraud.
The accusation said to Engelmayer that they had “no plan” to change their accusations against Kwon at the time.
David Patton, Kwon’s main lawyer and Heker Fink LLP partner, told Engelmayer that the content of the Blanche’s note could – at least indirectly – lead to movements prior to the Defense.
“I think it could potentially be the subject of certain preliminary movements,” said Patton. “It may or may not be directly linked to the note.” Patton said that the question of whether the cryptocurrencies involved in the case were or not titles could be relevant.
In a separate civil affair deposited by the Securities and Exchange Commission of the United States (SEC) against Kwon and Terraform Labs last year, in which Kwon and his company were tried responsible for fraud, another SDNY judge concluded that the tokens involved in the case were in fact titles.
During Thursday’s hearing, Engelmayer declared both the accusation and the defense to inform him well before the trial if they were planning to ask that he would join one of the decisions or conclusions rendered by the court in the dry case.
The next batch of pre-processes should strike the file in July, and a third state conference is scheduled for June 12 at 11 a.m. in New York.
Due to the planning challenges, the start date of the Kwon criminal trial was postponed by three weeks from January 26, 2026 to February 17, 2026.
Read more: is the Kwon criminal trial planned for 2026 while lawyers deal with the range of “massive” evidence
