U.S. prosecutors are contemplating charges against Dragonfly Capital Partners and its partners over investments in Tornado Cash developers. This revelation arose during the criminal trial of Tornado Cash developer Roman Storm, where Assistant U.S. Attorney Thane Rehn disclosed intentions to pursue charges against Dragonfly's Tom Schmidt. The firm had invested in Pepper Sec, related to Tornado Cash, in 2020. Dragonfly's co-founder, Haseeb Qureshi, asserted their compliance with laws and disbelief in the validity of potential charges. Schmidt was subpoenaed, and his devices were seized, complicating matters further. Tornado Cash, an Ethereum-based mixer, has been scrutinized for facilitating illicit transactions, with Storm facing severe penalties for allegedly operating without a license and violating U.S. sanctions. The case raises significant legal questions about developers' responsibilities for their coded platforms amidst concerns for user privacy.

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