The U.S. Department of Justice is contemplating criminal charges against Dragonfly Capital Partners and its general partner, Tom Schmidt, related to their investment in Tornado Cash's developer, Pepper Sec, made in 2020. During Roman Storm's trial, an Assistant U.S. Attorney revealed these considerations, which followed actions such as the seizure of Schmidt's devices and a raid on his residence. Dragonfly's co-founder, Haseeb Qureshi, stated they have fully cooperated with the investigation and refuted the potential charges as absurd. Furthermore, an email exchange indicated that Storm sought advice from Dragonfly executives regarding compliance features for Tornado Cash. The ongoing trial poses significant implications for the legal responsibilities of software developers concerning their code. Tornado Cash, an Ethereum-based mixer that anonymizes cryptocurrency transactions, has faced backlash after its alleged use by criminals for money laundering, bringing forth legal questions of developer liability regardless of user conduct.

Source đź”—