Kwon’s Legal Battle Continues Despite DOJ Crypto Shift

• U.S. prosecutors confirm no changes to charges against Terraform Labs founder Do Kwon.
• DOJ memo shifts focus away from prosecuting crypto firms unless under special circumstances.
• Kwon’s trial has been delayed to Feb 2026, with a pre-trial conference set for June 2025.

U.S. prosecutors have reaffirmed their refusal to modify the charges against Terraform Labs founder Do Kwon. This move comes after the Department of Justice (DOJ) issued a memo changing its approach regarding regulating the crypto industry. In the memo, released by Deputy Attorney General Todd Blanche, the staff was warned against scrutinizing crypto firms except under certain conditions.

DOJ Shifts Crypto Enforcement

On April 7, 2025, Blanche revealed that the DOJ would cease enforcing actions against crypto firms, such as exchanges and mixing services. This indicated that regulation of digital assets would be beyond criminal justice domains, enabling regulators to take charge. 

During the pre-trial hearing on Thursday, the prosecution maintained that the charges leveled against Kwon would not change. Prosecutors also explained that the recently released DOJ memo is not relevant to the case and would not cause any changes. This means that Kwon will continue to be charged with severe offenses, which are securities fraud, wire fraud, and conspiracy to commit money laundering.

Kwon’s Trial Rescheduled

Kwon’s attorney, David Patton, commented on the DOJ’s recent enforcement actions, suggesting they could be addressed through pre-trial motions. However, he was unsure about whether these actions were connected to Blanche’s memo. His remarks indicate that as the case progresses, the defense will closely monitor the DOJ’s evolving stance on crypto-related prosecutions.

The trial has been rescheduled from January 26, 2026, to February 17, 2026, and the next pre-trial conference was on June 12, 2025. This means the legal action against Kwon will have to wait longer, increasing the uncertainty surrounding Kwon’s case.

Related: Terraform Labs Launches Claims Portal for Crypto Losses

Kwon is charged with severe charges, including commodities futures fraud and conspiracy. If he is found guilty of all the charges, he could be sentenced to 130 years. He pleaded not guilty to the charges early this year when he was brought to the United States from Montenegro.

Do Kwon’s case is expected to set a key precedent that could shape how cryptocurrencies are regulated in the future. The DOJ’s handling of this trial may offer insights into its broader strategy of managing the rapidly expanding digital asset sector.  

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