The U.S. government is contemplating criminal charges against Dragonfly Capital Partners and its partners, including Tom Schmidt, related to their investment in Tornado Cash developers. This development emerged during the criminal trial of Tornado Cash's Roman Storm. The venture capital firm invested in the developer's entity, Pepper Sec Inc., in 2020. Defense lawyers attempted to call Schmidt as a witness, but he pleaded the Fifth Amendment, leaving his potential testimony uncertain. Dragonfly's co-founder, Haseeb Qureshi, stated that they have cooperated with the government's investigation, asserting that they believe the potential charges are unfounded. Tornado Cash, launched in 2019, is an Ethereum-based mixer designed to anonymize crypto transactions. Storm faces serious legal issues, including operating an unlicensed money-transmitting business and violating sanctions, potentially leading to a sentence of up to 45 years. The accusations against him emphasize the alleged use of Tornado Cash by criminals to launder money, igniting debate about developers' liability in the crypto sector.

Source šŸ”—