The U.S. government is contemplating criminal charges against Dragonfly Capital Partners for its investment in Tornado Cash developer Pepper Sec. This development arose during the criminal trial of Tornado Cash developer Roman Storm, with Assistant U.S. Attorney Thane Rehn stating potential charges against Dragonfly's Tom Schmidt and other associates. Dragonfly had invested in Pepper Sec in 2020 and has since received a subpoena from the DOJ, asserting their compliance with legal standards. Schmidt invoked the Fifth Amendment during testimony, protecting him from self-incrimination. Dragonfly co-founder Haseeb Qureshi expressed confidence in their legal position and intent to defend against what he claims are baseless charges. The case is pivotal for determining the legal accountability of software developers for their work. Tornado Cash, created in 2019, functions as a coin mixer on the Ethereum network, complicating transaction tracking. Storm faces serious charges, including operating an unlicensed money-transmitting business and violations of U.S. sanctions. Many in the crypto community argue that developers should not be held liable for users' actions involving their platforms.

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