The U.S. Department of Justice is contemplating charges against Dragonfly Capital's Tom Schmidt and other partners due to the firm's investment in Tornado Cash developers, disclosed during Roman Storm's criminal trial. The Assistant U.S. Attorney mentioned potential charges as Schmidt's legal team sought to call him as a witness. Dragonfly invested in Pepper Sec Inc., owned by Tornado Cash developers, in 2020. Dragonfly's co-founder, Haseeb Qureshi, asserted their compliance with the law despite a subpoena from the DOJ. Schmidt pleaded the Fifth Amendment regarding self-incrimination when called to testify. Tornado Cash, an Ethereum-based mixer, has faced scrutiny for allegedly allowing criminals to launder money. Storm could face 45 years in prison for multiple charges stemming from his operation of the mixing service and violation of U.S. sanctions. The case raises significant questions about the legal responsibilities of software developers in relation to their code and user activities.

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