Doj is considering calculating Crypto VC company Dragonfly in connection with Tornado Cash

American public prosecutors are considering charges against Tom Schmidt of Dragonfly Capital Partners and some of his colleagues about their investment in the developer behind Tornado Cash, said assistant lawyer Than Rehn on Friday during the criminal process of Roman Storm in New York.

The revelation of the federal government came when lawyers of the defense tried to call Schmidt as a witness in the storm process. The general partner and his team invested in Pepper Sec., An entity owned by Tornado Cash developers, in 2020.

“In 2023 we received a DOJ summons and we fully cooperated with the government’s investigation into Tornado-Contant Money, convinced that we have always complied with the law,” Haseb Qureshi, co-founder and general partner at Dragonfly, said Friday in a post on social media.

“We do not believe that the Doj would actually bring such absurd and unfounded charges,” he said, adding that the VC company and his partners would “defend ourselves strongly.”

Qureshi did not respond immediately Decrypts Request for extra comments about this.

After he was called to the stands, Schmidt argued on the fifth amendment, which protects him against self -accusation. However, it remains unclear from writing time or the executive power is still forced to testify in the federal court.

The outing of the potential matter of the federal government against Dragonfly comes in the midst of the criminal process of Tornado Cash Developer Roman Storm – a very consistent case that can determine whether software developers are legally responsible for what they encode.

Tornado Cash was founded in 2019 and is an Ethereum -based coin mixer that obsoles the origin and destination of cryptocurrency transactionsmaking them difficult to trace on public block chains. It is an automated tool that is built with smart contracts – which contains the code that drives down disabled apps – which means that there is no human intermediary who carries out the transactions.

Storm confronted up to 45 years in prison reportedly The operation of a company without a permit and the violation of American sanctions, in addition to the alleged conspiracy to wash money white with regard to Tornado-Contant Money.

The US government claims that the mixer of storm was used by criminals to wash their unlawfully obtained profit and to expose the developer to legal obligations. But many members of the Crypto community claim that Storm should not be held responsible for the activities of users on its platform, referring to Cypherpunk principles of privacy and individual autonomy.

Storm and his co-founders exchanged e-mails with Dragonfly managers, including Qureshi and Schmidt, according to federal prosecutors. In such an e-mail, Storm and his team asked advice from the Venture Capitalists about integrating know-your-customer (or KYC) functions with Tornado Cash, a process for identifying users of financial services platforms in accordance with the American regulations.

Schmidt’s house was robbed in the course of the criminal investigation of the US to Roman Storm and Tornado Cash, Anger reported On Friday. The devices of the general partner were also seized, according to the publication.