New Developments in Cryptocurrency Prosecutions: What You Need to Know
A recent memo from the U.S. Department of Justice regarding its crypto enforcement priorities has sparked discussions about its potential impact on ongoing cases, including that of Terraform Labs co-founder Do Kwon. Despite the memo dismantling the DOJ’s crypto unit and narrowing its focus on certain enforcement actions, prosecutors have stated that it will not affect Kwon’s prosecution.
The memo, issued by U.S. Deputy Attorney General Todd Blanche, outlined new guidelines for prosecuting crypto-related offenses, stating that the DOJ will no longer pursue charges against crypto exchanges, mixing services, or offline wallets for the actions of their users. Additionally, the memo advised against pursuing violations of federal securities or commodities laws unless under specific circumstances where alternative charges are available.
During a recent hearing, U.S. District Court Judge Paul Engelmayer in the Southern District of New York asked prosecutors about the impact of the memo on Kwon’s case, which includes charges of commodities fraud, securities fraud, wire fraud, and conspiracy to defraud. Prosecutors confirmed that they do not plan to alter the charges against Kwon at this time.
Kwon’s lead attorney, David Patton, acknowledged that the contents of the memo could potentially lead to pre-trial motions from the defense, particularly regarding the classification of the cryptocurrencies involved in the case as securities. This issue was previously addressed in a civil case brought by the U.S. Securities and Exchange Commission against Kwon and Terraform Labs.
Engelmayer instructed both the prosecution and defense to notify the court in advance if they intended to rely on any rulings from the SEC case during Kwon’s trial. The next round of pre-trial motions is scheduled for July, with a status conference set for June 12 in New York.
Due to scheduling conflicts, Kwon’s criminal trial start date has been postponed from January 26, 2026, to February 17, 2026. The legal teams are currently grappling with a substantial amount of evidence, leading to delays in the proceedings.
For further updates on Do Kwon’s case and the evolving landscape of cryptocurrency prosecutions, stay tuned for more information as the trial date approaches.