U.S. prosecutors are contemplating criminal charges against Dragonfly Capital Partners, including Tom Schmidt, related to their investment in the developers behind Tornado Cash. This announcement occurred during the criminal trial of Tornado Cash developer Roman Storm, where the DOJ revealed their investigation into Dragonfly. Schmidt's devices were seized, and he invoked the Fifth Amendment when called to testify. Dragonfly's co-founder, Haseeb Qureshi, stated their firm had fully cooperated with the investigation and expressed confidence in their legal standing. The case against Tornado Cash revolves around allegations that its coin mixer was used for illicit money laundering, raising significant legal questions about the liability of software developers for user activities on their platforms. The ongoing case could set a precedent for the accountability of tech developers in the crypto space.

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