The U.S. government is contemplating charges against Dragonfly Capital Partners, specifically its general partner Tom Schmidt, due to their investment in Tornado Cash developer Pepper Sec Inc. during 2020. This discussion arose during the criminal trial of Tornado Cash developer Roman Storm, where it was revealed that Schmidt's devices were seized and his home raided as part of the government's investigation. Dragonfly's co-founder, Haseeb Qureshi, expressed confidence in their compliance with the law and deemed the potential charges as absurd and groundless, stating they would defend themselves vigorously. Pursuing charges against Dragonfly is significant as it could impact the legal responsibilities of software developers regarding user activities on their platforms. Storm faces severe penalties for operating what the government claims to be an unlicensed money-transmitting business and for violating U.S. sanctions. Tornado Cash is known for obscuring cryptocurrency transactions, raising concerns about its use in money laundering and criminal activities. The trial’s outcome may establish critical precedents for the liability of developers in similar situations.

Source 🔗