The U.S. government is contemplating criminal charges against Dragonfly Capital Partners and its partners, including Tom Schmidt, linked to their investment in Tornado Cash developer Pepper Sec Inc. This development emerged during Roman Storm's trial, where prosecutors disclosed their investigation into Dragonfly’s involvement. Storm, a Tornado Cash developer, faces serious charges including operating an unlicensed money-transmitting business and violating U.S. sanctions. Dragonfly has stated that they received a DOJ subpoena and have cooperated fully, asserting they have complied with the law. Despite Schmidt's Fifth Amendment plea during the trial, it remains uncertain whether he will still testify. The prosecution also noted correspondence between Dragonfly executives and Storm regarding compliance with U.S. regulations, further complicating the case. The situation highlights broader concerns regarding the legal responsibilities of software developers in the cryptocurrency space, raising questions about privacy and individual autonomy in financial transactions.

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