The U.S. Department of Justice is contemplating criminal charges against Dragonfly Capital Partners and its associates, including Tom Schmidt, over their investment in Tornado Cash developers. During Roman Storm's criminal trial, Assistant U.S. Attorney Thane Rehn revealed the potential charges, specifically citing Dragonfly's 2020 investment in Pepper Sec, a firm connected to Tornado Cash. Dragonfly co-founder Haseeb Qureshi stated they have cooperated fully with the investigation and expressed confidence that the charges would be deemed unfounded. Schmidt's devices were seized during a raid, and he invoked the Fifth Amendment when called to testify. Tornado Cash, created in 2019, is a coin mixer designed to obscure transaction origins, and Storm faces up to 45 years in prison for operating an unlicensed money-transmitting business. Many in the crypto community argue against holding developers liable for user activities, promoting principles of privacy and autonomy.

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