Federal prosecutors in the U.S. are contemplating charges against Dragonfly Capital Partners and its general partner, Tom Schmidt, related to their investment in Tornado Cash developers, revealed at the trial of Roman Storm, a developer of Tornado Cash. Assistant U.S. Attorney Thane Rehn stated this during the trial where Schmidt invoked the Fifth Amendment when called to testify. The firm, which invested in a related entity, Pepper Sec Inc., in 2020, expresses confidence in its legal compliance and denies any wrongdoing. Roman Storm faces serious charges including operating an unlicensed money-transmitting business and conspiracy to launder money as authorities claim Tornado Cash was utilized by criminals to launder funds. Dragonfly's involvement is under scrutiny following a subpoena, and the legal proceedings could set important precedents regarding the accountability of software developers for their platforms' use.

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