U.S. prosecutors are considering charging Dragonfly Capital Partners' Tom Schmidt and other partners over their investment in the developer behind Tornado Cash during a trial involving Tornado Cash developer Roman Storm. This investment, made in 2020, has drawn the attention of the DOJ, which recently seized Schmidt's devices and conducted a raid at his home. Dragonfly co-founder Haseeb Qureshi expressed confidence in their legal compliance and claimed that potential charges would be absurd. Schmidt invoked the Fifth Amendment to avoid self-incrimination when called to testify. The case is significant as it could set precedents regarding the legal responsibilities of software developers for user actions on their platforms. Tornado Cash, an Ethereum-based mixer, has been used by criminals for laundering money, prompting legal scrutiny against its developers and investors.

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