- Does Kwon face up to 130 years in prison if convicted on all federal fraud and conspiracy charges?
- DOJ memo limits crypto firm prosecutions but won’t affect the case against Do Kwon.
- Do Kwon’s trial has been postponed to February 17, 2026, with the next hearing in June 2025.
Federal prosecutors declined to modify any charges against Do Kwon from Terraform Labs despite Department of Justice policy changes regarding cyber fraud. A memo issued by Deputy Attorney General Todd Blanche has led the DOJ to restrict crypto firm prosecutions except in specified instances.
According to Blanche’s memorandum, the DOJ determined to avoid using criminal procedures to enforce regulatory standards. According to the memo, regulators serving under the Trump administration will handle these matters without using criminal justice procedures. During the April 10 pre-trial hearing, prosecutors confirmed that the opposite direction outlined in the memo would not affect their current criminal proceedings against Kwon.
Multiple charges that included wire fraud, securities fraud and commodities fraud, together with conspiracy to commit money laundering, came from the DOJ toward Kwon. The prosecution team insists they follow these criminal charges because they target specific illegal acts instead of performing regulatory duties.
Kwon’s Legal Team May Reference Memo in Pre-Trial Motions
At Thursday’s pre-trial conference, Kwon’s attorney, David Patton, acknowledged the DOJ memo. He suggested it might play a role in upcoming pre-trial motions, although he did not confirm whether the defence would tie its arguments to the memo’s contents. Patton said the policy shift could be relevant depending on how the court interprets its implications about Kwon’s charges.
Despite this, the prosecution clarified that the charges arise from alleged deceptive practices and not from the DOJ attempting to enforce regulatory standards. This distinction allows prosecutors to continue without conflicting with the new DOJ policy outlined in the memo.
Kwon, who has denied all allegations, pleaded not guilty earlier this year in New York after being extradited from Montenegro. U.S. authorities allege he misled investors about the stability of TerraUSD and Terra (LUNA), leading to losses totalling tens of billions of dollars globally.
Trial Postponed to 2026 Amid Ongoing Legal Developments
The federal court has delayed the trial date to February 17, 2026. It was initially scheduled for January 26, 2026. The next pre-trial conference will take place on June 12, 2025. This delay gives both legal teams additional time to prepare, especially in light of recent developments concerning federal crypto enforcement.
While the DOJ’s broader stance on crypto regulation has shifted, the government maintains that Kwon’s case involves serious criminal activity unrelated to those policy changes. If convicted on all counts, Kwon could face a maximum sentence of up to 130 years. The case remains one of the most closely watched legal actions in the cryptocurrency space.
