The post DOJ Is Considering Charging Crypto VC Firm Dragonfly in Connection With Tornado Cash appeared on BitcoinEthereumNews.com.

In brief The U.S. government is considering bringing charges against Dragonfly’s Tom Schmidt and other partners, Assistant U.S. Attorney Thane Rehn said Friday in federal court. Dragonfly invested in Tornado Cash developers’ Pepper Sec in 2020. Federal prosecutors seized Schmidt’s devices and raided his house in connection to their investigation into Roman Storm. U.S. prosecutors are considering bringing charges against Dragonfly Capital Partners’ Tom Schmidt and some of his colleagues over their investment in the developer behind Tornado Cash, Assistant U.S. Attorney Thane Rehn said Friday at Roman Storm’s criminal trial in New York. The federal government’s revelation came as defense lawyers attempted to call Schmidt as a witness in Storm’s trial. The general partner and his team invested in Pepper Sec Inc., an entity owned by Tornado Cash developers, in 2020.  “In 2023, we received a DOJ subpoena and have fully cooperated with the government’s investigation of Tornado Cash, confident that we have always complied with the law,” Haseeb Qureshi, co-founder and general partner at Dragonfly, said Friday in a social media post.  “We don’t believe the DOJ would actually bring such absurd and groundless charges,” he said, adding that the VC firm and its partners would “vigorously defend ourselves.”  Qureshi did not immediately respond to Decrypt’s request for additional comment on the matter.  After being called to the stand, Schmidt pleaded the Fifth Amendment, which protects him against self-incrimination. However, it remains unclear as of writing time whether the executive will still be forced to testify in federal court. The outing of the federal government’s potential case against Dragonfly comes amid Tornado Cash developer Roman Storm’s criminal trial—a highly consequential case that could determine whether software developers are legally responsible for what they code. Created in 2019, Tornado Cash is an Ethereum-based coin mixer that obfuscates the…

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Filed under: News - @ July 25, 2025 11:38 pm