Do Kwon, the co-founder of Terraform Labs, remains at the center of a major crypto legal storm in the U.S. The federal court case against him continues to evolve, and its direction may now depend on what happens in Congress.
He is facing criminal charges in connection with the loss of the “stablecoin” project Luna. The crash of his firm led to huge losses in the cryptocurrency market. He was brought before US prosecutors on allegations that he misled investors and violated security laws.
Recently, however, a new memo from the Department of Justice has added certain doubts. It concerns the approaches used by the governments in defining and prosecuting matters related to digital assets, including whether they are to be viewed as securities.
Crypto court reviews DOJ Memo before trial
At a recent court session in New York, SNC prosecutors let it be known that they were aware of the DOJ memo and advised that they did not plan to alter the charges for now. The employee told both parties to keep the internal review moving. He foresees an explicitness from the executive branch before the case comes to the trial system.
Kwon has pleaded not guilty before the court. The court did not grant him bail, so he is kept in detention. His legal team may also soon file a motion directed towards the new position or any further development. Such developments imply that there might be structural changes to the indictment or to its claims system.
Following pretrial scheduling, the trial is scheduled to start on February 17, 2026. The next status hearing will be on June 12. Up to now, the court has looked through numerous evidence materials; among other things, documents from another state have been considered. Such information is not disclosed in public filings yet.
Do Kwon case could shape U.S. crypto laws
This incident marks a growing trend in the government’s suppression of crypto activists and platforms. As the U.S. government is developing its more general rules about digital assets, cases such as Do Kwon’s provide likely precedents to follow.
This law can be further amended, which will directly affect the way the system of justice deals with crimes connected to blockchain technology. The legal process has already cast a wide net for both the crypto watchers and the public.
The case even served as an inspiration for a new book by Inner City Press, which has been covering the issue since the very beginning. For now, Do Kwon falls prey to detention. The blockchain also exists in the world. What goes on in court and Congress may shape the next chapter of crypto enforcement in the US system
