Policy, Do Kwon, Terra ecosystem Prosecutors knowledgeable a New York select on Thursday that they don’t plan to change the charges in the direction of Kwon in light of the memo.
NEW YORK, NY — A present U.S. Department of Justice staff memo dismantling the DOJ’s crypto unit and narrowing the scope of its crypto-related enforcement priorities could don’t have any have an effect on on the prosecution of Terraform Labs co-founder and former CEO Do Kwon, prosecutors talked about Thursday.
The memo, despatched Monday night time by U.S. Deputy Attorney General Todd Blanche, educated workers that the DOJ wouldn’t be pursuing prosecution in the direction of crypto exchanges, mixing firms, or offline wallets for the acts of their end prospects. Blanche knowledgeable workers to not criminally value any violations of federal securities or commodities authorized tips, moreover beneath specific circumstances, in cases the place the charges would “require the [DOJ] to litigate whether a digital asset is a ‘security’ or a ‘commodity’” and there could also be an adequate varied authorized value.
During a listening to on Thursday, U.S. District Court Judge Paul Engelmayer of the Southern District of New York (SDNY) requested prosecutors whether or not or not Blanche’s memo would have any have an effect on on the charges in the direction of Kwon, which embrace two counts of commodities fraud and two counts of securities fraud, along with 5 completely different costs along with wire fraud and conspiracy to defraud.
The prosecution knowledgeable Engelmayer that they’ve “no plans” to change their costs in the direction of Kwon in the meanwhile.
David Patton, Kwon’s lead authorized skilled and a confederate at Hecker Fink LLP, knowledgeable Engelmayer that the contents of Blanche’s memo would possibly — at least in a roundabout way — lead to some pre-trial motions from the safety.
“I do think it could potentially be the subject of some pre-trial motions,” Patton talked about. “It may or may not be directly related to the memo.” Patton specified that the questions of whether or not or not the cryptocurrencies involved inside the case had been securities or not could very nicely be associated.
In a separate civil case launched by the U.S. Securities and Exchange Commission (SEC) in the direction of Kwon and Terraform Labs ultimate yr, by which Kwon and his agency had been found to be liable for fraud, one different SDNY select found that the tokens involved inside the case had been, the reality is, securities.
During Thursday’s listening to, Engelmayer knowledgeable every the prosecution and the safety to inform him successfully prematurely of the trial within the occasion that they consider to request that he adhere to any of the rulings or findings made by the courtroom inside the SEC case.
The subsequent batch of pre-trial motions are anticipated to hit the docket in July, and a third standing conference has been scheduled for June 12 at 11 a.m. in New York.
Due to scheduling challenges, the start date for Kwon’s authorized trial has been pushed once more three weeks from January 26, 2026 to February 17, 2026.
Read additional: Do Kwon’s Criminal Trial Set for 2026 as Lawyers Deal With ‘Massive’ Trove of Evidence
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