The U.S. Department of Justice (DOJ) is contemplating criminal charges against Dragonfly Capital Partners and its associates for their investment in the developers behind Tornado Cash. This revelation emerged during the criminal trial of Tornado Cash developer Roman Storm. The firm made an investment in 2020 in Pepper Sec Inc., which is associated with Tornado Cash developers. Dragonfly's co-founder Haseeb Qureshi asserted that they fully cooperated with the government's investigation and expressed confidence in their legal compliance. Meanwhile, Dragonfly's Tom Schmidt invoked his Fifth Amendment rights when called to testify, but the situation remains tenuous as federal prosecutors have raided his home and seized devices. The case, which could hold developers accountable for their software, has caused significant concern in the crypto community regarding developer liability and individual privacy rights. Storm faces up to 45 years in prison for multiple serious charges.

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