The U.S. government is considering criminal charges against Dragonfly Capital Partners and some of its partners, including Tom Schmidt, for their investment in Tornado Cash developers. During Roman Storm’s criminal trial, prosecutors revealed that federal investigators have seized Schmidt's devices and raided his home. Dragonfly, which invested in Pepper Sec, an entity owned by Tornado Cash developers, received a subpoena from the DOJ. Haseeb Qureshi, co-founder of Dragonfly, expressed confidence in their compliance with the law and stated they would vigorously defend themselves against any charges. Tornado Cash, an Ethereum-based coin mixer, has been under scrutiny for allegedly facilitating money laundering. Storm faces serious charges, including operating an unlicensed money-transmitting business and potential sanctions violations. Critics argue that developers should not be held responsible for users’ actions on their platforms, highlighting the ongoing debate over developer liability in the crypto space.

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