The U.S. Department of Justice (DOJ) has retracted its plan to pursue charges against Dragonfly Capital regarding its investment in Tornado Cash, an Ethereum-based crypto mixer. Haseeb Qureshi, co-founder of Dragonfly, confirmed that the DOJ acknowledged in court that previous reports suggesting they were targeting his firm were inaccurate. This development comes after a federal prosecutor indicated charges could be considered for Dragonfly's personnel during the trial of Roman Storm, co-founder of Tornado Cash, who faces severe charges related to money laundering. Defense attorneys sought to call Tom Schmidt, a partner at Dragonfly, as a witness to provide context for their investment. However, prosecutors' comments regarding potential charges prompted Schmidt to invoke his Fifth Amendment rights. The case reflects broader questions about whether developers and investors in open-source projects can face prosecution, especially as privacy solutions in the crypto space come under increased scrutiny.

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