1 week ago
NEW YORK, NY — A caller U.S. Department of Justice staff memo dismantling the DOJ’s crypto portion and narrowing the scope of its crypto-related enforcement priorities volition person nary interaction connected the prosecution of Terraform Labs co-founder and erstwhile CEO Do Kwon, prosecutors said Thursday.
The memo, sent Monday evening by U.S. Deputy Attorney General Todd Blanche, informed unit that the DOJ would nary longer beryllium pursuing prosecution against crypto exchanges, mixing services, oregon offline wallets for the acts of their extremity users. Blanche told unit not to criminally complaint immoderate violations of national securities oregon commodities laws, but nether circumstantial circumstances, successful cases wherever the charges would “require the [DOJ] to litigate whether a integer plus is simply a ‘security’ oregon a ‘commodity’” and determination is an capable alternate transgression charge.
During a proceeding connected Thursday, U.S. District Court Judge Paul Engelmayer of the Southern District of New York (SDNY) asked prosecutors whether Blanche’s memo would person immoderate interaction connected the charges against Kwon, which see 2 counts of commodities fraud and 2 counts of securities fraud, arsenic good arsenic 5 different charges including ligament fraud and conspiracy to defraud.
The prosecution told Engelmayer that they person “no plans” to alteration their charges against Kwon astatine this time.
David Patton, Kwon’s pb lawyer and a spouse astatine Hecker Fink LLP, told Engelmayer that the contents of Blanche’s memo could — astatine slightest indirectly — pb to immoderate pre-trial motions from the defense.
“I bash deliberation it could perchance beryllium the taxable of immoderate pre-trial motions,” Patton said. “It whitethorn oregon whitethorn not beryllium straight related to the memo.” Patton specified that the questions of whether the cryptocurrencies progressive successful the lawsuit were securities oregon not could beryllium relevant.
In a abstracted civilian lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against Kwon and Terraform Labs past year, successful which Kwon and his institution were found to beryllium liable for fraud, different SDNY justice recovered that the tokens progressive successful the lawsuit were, successful fact, securities.
During Thursday’s hearing, Engelmayer told some the prosecution and the defence to pass him good successful beforehand of the proceedings if they planned to petition that helium adhere to immoderate of the rulings oregon findings made by the tribunal successful the SEC case.
The adjacent batch of pre-trial motions are expected to deed the docket successful July, and a 3rd presumption league has been scheduled for June 12 astatine 11 a.m. successful New York.
Due to scheduling challenges, the commencement day for Kwon’s transgression proceedings has been pushed backmost 3 weeks from January 26, 2026 to February 17, 2026.
Read more: Do Kwon’s Criminal Trial Set for 2026 arsenic Lawyers Deal With ‘Massive’ Trove of Evidence
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