The U.S. government is contemplating charges against Dragonfly Capital Partners’ Tom Schmidt and associates due to their investment in Tornado Cash developer Pepper Sec in 2020. This announcement came during the criminal trial of Tornado Cash developer Roman Storm. Assistant U.S. Attorney Thane Rehn mentioned that federal prosecutors have already seized Schmidt's devices and raided his home as part of the ongoing investigation. Dragonfly co-founder Haseeb Qureshi stated they have complied with the law and expressed doubt regarding the potential charges. During the trial, Schmidt invoked the Fifth Amendment, protecting him against self-incrimination. Tornado Cash is a coin mixer designed to anonymize cryptocurrency transactions, facing scrutiny due to its alleged use in money laundering. Storm could face up to 45 years in prison for operating an unlicensed money-transmitting business and violating U.S. sanctions. This case is pivotal, raising questions about legal responsibilities of developers for user activities on decentralized platforms.

Source 🔗