Overview

• The DOJ clarified it will not prosecute Dragonfly Capital Partners or any of its executives for their 2020 investment in the Tornado Cash protocol.
• The clarification comes after earlier in-court remarks by prosecutors at Roman Storm’s money-laundering trial had hinted at possible charges against Dragonfly personnel.
• Dragonfly obtained external legal advice before investing in Tornado Cash, concluding the mixer complied with U.S. regulations at the time.
• Co-founder Haseeb Qureshi described the initial suggestion of charges as unprecedented and a violation of DOJ policy on public speculation about unindicted third parties.
• Observers warn that targeting investors in privacy-preserving technology could deter venture capital support for open-source blockchain tools.