The U.S. government may pursue charges against Dragonfly Capital's Tom Schmidt and colleagues over their investment in Tornado Cash's developer, as revealed during the trial of Tornado Cash's developer, Roman Storm. Dragonfly invested in Pepper Sec, the entity behind Tornado Cash, in 2020. Assistant U.S. Attorney Thane Rehn indicated that Schmidt's devices were seized during the investigation. Despite the investigation, Dragonfly's co-founder Haseeb Qureshi expressed confidence in their legal compliance and plans to vigorously defend against potential charges. Schmidt, called to testify, invoked the Fifth Amendment to avoid self-incrimination. Tornado Cash, an Ethereum-based mixing service, has been embroiled in controversy for allegedly facilitating money laundering for criminal activities. As the case unfolds, it raises questions about legal accountability for software developers in the blockchain space.

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