The U.S. government is contemplating criminal charges against Dragonfly Capital Partners, focusing on its investment in Tornado Cash developer, Pepper Sec Inc., revealed during the criminal trial of Tornado Cash developer Roman Storm. Assistant U.S. Attorney Thane Rehn mentioned the potential charges against Dragonfly's Tom Schmidt and colleagues, noting that Schmidt's devices were seized and his home raided as part of the investigation. Dragonfly co-founder Haseeb Qureshi stated that the firm has fully cooperated with the DOJ and expressed confidence in its compliance with legal standards, labeling the potential charges as absurd. Tornado Cash, an Ethereum-based coin mixer, is under scrutiny for being used by criminals to launder money. Storm faces serious legal repercussions, including up to 45 years in prison for operating an unlicensed money-transmitting business and violating U.S. sanctions. The trial raises questions about the legal responsibilities of software developers regarding user actions on their platforms.

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