The U.S. Department of Justice is contemplating criminal charges against Dragonfly Capital Partners due to their investment in Tornado Cash developers, as revealed during the trial of developer Roman Storm. Assistant U.S. Attorney Thane Rehn disclosed plans to possibly charge Dragonfly's co-founder Tom Schmidt and his colleagues for their financial backing of Pepper Sec Inc., a company affiliated with Tornado Cash. Dragonfly has been cooperating with the investigation since receiving a subpoena in 2023 and maintains its legal compliance. In a recent social media statement, co-founder Haseeb Qureshi expressed confidence that the government wouldn't pursue charges they consider baseless, asserting their readiness to defend themselves. The trial has significant implications regarding the legal accountability of software developers for the actions of users on their platforms. Tornado Cash serves as an Ethereum-based coin mixer designed to obscure cryptocurrency transactions, raising concerns over its use in illicit activities, which the government claims exposes Storm to severe legal repercussions.

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