The U.S. government is contemplating charges against Dragonfly Capital Partners, specifically Tom Schmidt and other partners, over their investment in Tornado Cash developers. This revelation emerged during Roman Storm's criminal trial, where the prosecution mentioned that Dragonfly invested in Pepper Sec, a company tied to Tornado Cash, in 2020. Haseeb Qureshi, co-founder of Dragonfly, asserted their compliance with the law and expressed confidence that the DOJ would not bring forward what he deemed groundless charges. Schmidt invoked the Fifth Amendment when called to testify in court, although it remains uncertain whether he will ultimately face judicial demands to testify. Tornado Cash, established in 2019, functions as a coin mixer to obscure transaction origins on the Ethereum blockchain. Storm is facing significant legal troubles for allegedly operating an unlicensed money-transmitting business and violating U.S. sanctions.

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