The U.S. government is contemplating criminal charges against Dragonfly Capital Partners' Tom Schmidt and other colleagues due to their investment in Tornado Cash developers. This development arose during Roman Storm's criminal trial, where it was revealed that Dragonfly invested in Pepper Sec, a company linked to Tornado Cash, in 2020. Assistant U.S. Attorney Thane Rehn indicated that authorities had seized Schmidt's devices and conducted a raid on his home as part of their investigation. Dragonfly co-founder Haseeb Qureshi stated that they fully cooperated with the Department of Justice and asserted their compliance with the law, expressing confidence that the charges were groundless. The trial is significant as it could establish whether software developers bear legal responsibility for their creations. Tornado Cash, created in 2019, is an Ethereum-based mixer intended to obscure cryptocurrency transactions, which has come under scrutiny for allegedly being used by criminals. Roman Storm faces severe charges, including operating an unlicensed money-transmitting business and laundering money connected to Tornado Cash, with potential penalties of up to 45 years in prison.

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