Federal prosecutors are contemplating charges against Dragonfly Capital Partners and its general partner Tom Schmidt for their investment in Tornado Cash developers. During a criminal trial for Tornado Cash developer Roman Storm, Assistant U.S. Attorney Thane Rehn disclosed this potential development. Dragonfly, which invested in Pepper Sec Inc., owned by Tornado Cash developers, has cooperated with the ongoing investigation, asserting compliance with the law. However, they expressed confidence that the DOJ's prospective charges are unfounded. In a surprising turn, Schmidt invoked the Fifth Amendment when called to testify, leaving uncertainty regarding his potential testimony. The case is significant as it may set precedent on whether software developers hold legal responsibility for user activity on their platforms. Tornado Cash is an Ethereum-based tool designed to anonymize cryptocurrency transactions, and Storm faces severe penalties for allegedly facilitating monetary crimes. The troubleshooting raises questions about privacy in the crypto space and the legal liabilities of developers.

Source đź”—