The U.S. government is exploring charges against Dragonfly Capital Partners' Tom Schmidt and colleagues related to their investment in Tornado Cash's developer, Roman Storm. Federal prosecutors disclosed this during Storm's trial, where Schmidt had enforced his Fifth Amendment right against self-incrimination. In 2020, Dragonfly invested in Pepper Sec Inc., linked to Tornado Cash. Despite having cooperated with government investigations and asserting compliance with the law, co-founder Haseeb Qureshi stated they plan to defend against what they consider groundless charges. Tornado Cash, an Ethereum-based coin mixer, is under scrutiny for allegedly aiding criminals in laundering money. Storm could face serious legal repercussions, as the case raises questions about developers' responsibilities for their code and user activities. Concurrently, emails exchanged between Dragonfly and Tornado Cash developers highlight discussions around compliance features like KYC.

Source đź”—