The U.S. Department of Justice is contemplating charges against Dragonfly Capital Partners and its executives, including Tom Schmidt, related to their investments in Tornado Cash developers. This revelation was made during Roman Storm's criminal trial, where Storm faces charges for allegedly running an unlicensed money-transmitting business and violating U.S. sanctions. Dragonfly invested in Pepper Sec Inc., linked to Tornado Cash, in 2020. Following a DOJ subpoena, Dragonfly claimed full cooperation, asserting their legal compliance and dismissing the potential charges as baseless. Schmidt, on the stand, invoked the Fifth Amendment while the federal investigation continues to unfold. Tornado Cash, designed to enhance transaction privacy on Ethereum, has drawn scrutiny for its use in illicit activities. The case raises crucial legal questions regarding the accountability of software developers for the utilization of their platforms.

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