NEW YORK, NY — A latest U.S. Division of Justice workers memo dismantling the DOJ’s crypto unit and narrowing the scope of its crypto-related enforcement priorities can have no influence on the prosecution of Terraform Labs co-founder and former CEO Do Kwon, prosecutors stated Thursday.

The memo, despatched Monday night by U.S. Deputy Lawyer Normal Todd Blanche, knowledgeable workers that the DOJ would not be pursuing prosecution towards crypto exchanges, mixing providers, or offline wallets for the acts of their finish customers. Blanche advised workers to not criminally cost any violations of federal securities or commodities legal guidelines, besides underneath particular circumstances, in instances the place the fees would “require the [DOJ] to litigate whether or not a digital asset is a ‘safety’ or a ‘commodity’” and there’s an ample different prison cost.

Throughout a listening to on Thursday, U.S. District Court docket Decide Paul Engelmayer of the Southern District of New York (SDNY) requested prosecutors whether or not Blanche’s memo would have any influence on the fees towards Kwon, which embrace two counts of commodities fraud and two counts of securities fraud, in addition to 5 different expenses together with wire fraud and conspiracy to defraud.

The prosecution advised Engelmayer that they’ve “no plans” to alter their expenses towards Kwon presently.

David Patton, Kwon’s lead lawyer and a accomplice at Hecker Fink LLP, advised Engelmayer that the contents of Blanche’s memo might — at the very least not directly — result in some pre-trial motions from the protection.

“I do suppose it might probably be the topic of some pre-trial motions,” Patton stated. “It might or is probably not straight associated to the memo.” Patton specified that the questions of whether or not the cryptocurrencies concerned within the case had been securities or not could possibly be related.

In a separate civil case introduced by the U.S. Securities and Change Fee (SEC) towards Kwon and Terraform Labs final 12 months, during which Kwon and his firm had been discovered to be chargeable for fraud, one other SDNY choose discovered that the tokens concerned within the case had been, actually, securities.

Throughout Thursday’s listening to, Engelmayer advised each the prosecution and the protection to tell him properly prematurely of the trial in the event that they deliberate to request that he adhere to any of the rulings or findings made by the courtroom within the SEC case.

The following batch of pre-trial motions are anticipated to hit the docket in July, and a 3rd standing convention has been scheduled for June 12 at 11 a.m. in New York.

As a result of scheduling challenges, the beginning date for Kwon’s prison trial has been pushed again three weeks from January 26, 2026 to February 17, 2026.

Learn extra: Do Kwon’s Felony Trial Set for 2026 as Legal professionals Deal With ‘Huge’ Trove of Proof