The U.S. Department of Justice (DOJ) is considering criminal charges against Dragonfly Capital Partners due to their investment in Tornado Cash developer Pepper Sec Inc. during Roman Storm's ongoing criminal trial. The prosecutors revealed this possibility in court, suggesting that Dragonfly's Tom Schmidt and colleagues might face legal repercussions for their 2020 investment. Following a DOJ subpoena, Dragonfly has cooperated with the investigation. Haseeb Qureshi, a co-founder, asserted their confidence in compliance with the law and expressed disbelief over potential charges. Schmidt invoked his Fifth Amendment rights, complicating his testimony situation. The case against Storm centers on allegations of operating an unlicensed money-transmitting business and facilitating money laundering via Tornado Cash, a service that anonymizes crypto transactions. As the trial progresses, broader implications arise concerning developers' legal responsibilities for their code and the balance of privacy in digital finance.

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