DOJ Is Considering Charging Crypto VC Firm Dragonfly in Connection With Tornado Cash
U.S. prosecutors are considering charges against Dragonfly Capital Partners due to their investment in Tornado Cash developers, revealed during the trial of Tornado Cash developer Roman Storm. During the proceedings, Assistant U.S. Attorney Thane Rehn indicated that charges could be forthcoming against Dragonfly's Tom Schmidt and others. The firm had invested in Pepper Sec Inc., owned by Tornado Cash developers, in 2020. Dragonfly's co-founder, Haseeb Qureshi, stated they received a DOJ subpoena in 2023 and are cooperating fully, emphasizing confidence in their compliance with the law. Schmidt, when called as a witness in Storm’s trial, invoked the Fifth Amendment. The case highlights significant legal implications for software developers related to user activities on their platforms. Tornado Cash, a coin mixer launched in 2019, faces scrutiny as it has allegedly been used for illicit money laundering, raising questions about developers' accountability under U.S. law.
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