Will the Ministry of Justice's "Stop Cryptocurrency Operations" Directive Benefit the Terra (LUNA) Case and Do Kwon? Prosecutors Made a Statement.

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US prosecutors have confirmed that a new memo from the Department of Justice narrowing the cryptocurrency enforcement priorities will not alter the criminal case against Do Kwon, co-founder and former CEO of Terraform Labs.

The DOJ internal memo released on Monday by Deputy Attorney General Todd Blanche directed employees to halt prosecutions involving crypto exchanges, mixing services, and offline wallets for actions taken by end users. It also recommended that criminal charges under securities or commodities laws not be pursued unless alternative charges are not available and lawsuits regarding a token's legal status cannot be avoided.

But at a hearing today in the Southern District of New York before U.S. District Judge Paul Engelmayer, prosecutors said the guidelines had no effect on the current charges against Kwon.

Kwon is facing a total of nine charges, including commodity and securities fraud, as well as electronic fraud and conspiracy to commit fraud. Prosecutors told Judge Engelmayer that they currently have no "plans" to modify or drop any charges.

Kwon's attorney, David Patton from Hecker Fink LLP, stated that the note may not directly affect the charges, but could relate to the shaping of pre-trial motions. Patton specifically mentioned that regarding the classification of the digital assets in question as securities, "I think this could potentially be the subject of some pre-trial motions."

In a relevant legal case initiated by the U.S. Securities and Exchange Commission, a separate SDNY judge had previously ruled that the tokens in question were securities and found Kwon and Terraform Labs liable for fraud. Today, Judge Engelmayer instructed both parties to inform him in advance if they wish to refer to the findings in the SEC case during the criminal trial.

While the series of motions is expected to be held in July before the next hearing, the third status conference is planned for June 12. Due to scheduling conflicts, Kwon's criminal trial has been postponed from January 26, 2026, to February 17, 2026.