DOJ Memo Won’t Affect Do Kwon Criminal Case, Say Prosecutors

U.S. prosecutors confirmed that a recent Department of Justice (DOJ) memo narrowing crypto-related enforcement will not impact the criminal case against Do Kwon, co-founder and former CEO of Terraform Labs. During a Thursday hearing in the Southern District of New York, Judge Paul Engelmayer asked if Deputy Attorney General Todd Blanche’s internal memo would affect charges against Kwon. Prosecutors responded that they have “no plans” to alter the current charges.

Blanche’s memo, sent Monday, instructed DOJ staff not to pursue criminal cases against crypto exchanges, mixing services, or offline wallets solely based on users’ actions. It also advised against charging violations of federal securities or commodities laws unless an alternative charge exists and avoids litigating whether a digital asset is a “security” or “commodity.”

Kwon faces multiple charges, including commodities fraud, securities fraud, wire fraud, and conspiracy. His lead attorney, David Patton, stated the memo could prompt pre-trial motions, noting the relevance of whether the crypto assets involved qualify as securities.

In a related civil case brought by the U.S. Securities and Exchange Commission (SEC), a judge previously ruled that the tokens involved were securities, and Kwon and Terraform Labs were found liable for fraud. Judge Engelmayer told both parties to notify him in advance if they plan to reference findings from the SEC case during Kwon’s criminal trial.

The next round of pre-trial motions is due in July, with a status conference set for June 12. Kwon’s criminal trial start date has been postponed from January 26 to February 17, 2026, due to scheduling conflicts.