The U.S. government is contemplating criminal charges against Dragonfly Capital Partners, specifically against Tom Schmidt and other associates, regarding their 2020 investment in Pepper Sec Inc., the developer behind Tornado Cash. This announcement came during the criminal trial of Tornado Cash developer Roman Storm, where Dragonfly had attempted to call Schmidt as a witness. The investment in Tornado Cash, a platform designed to obfuscate cryptocurrency transactions, has drawn scrutiny due to its alleged use for money laundering by criminals. Dragonfly's co-founder, Haseeb Qureshi, asserted their compliance with the law and expressed confidence that the DOJ's charges are unfounded. Following Schmidt's appearance, he invoked the Fifth Amendment, complicating the situation regarding his potential testimony. The ongoing case raises critical questions about the legal responsibilities of software developers for code-based operations that users conduct on their platforms.

Source 🔗