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6d ago

DOJ Weighs Criminal Charges Against Dragonfly Capital Partners in Tornado Cash Case

Prosecutors disclosed in open court that they are weighing charges against general partners after sealing that discussion from the transcript

Doj considering criminal charges against dragonfly capital employees for years old tornado cash investments
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Binance in court

Overview

  • Prosecutors revealed on July 25 during Roman Storm’s trial in New York that they are considering criminal counts against Dragonfly general partners over their 2020 investment.
  • The government asked a judge to seal the portion of the transcript where Assistant U.S. Attorney Thane Rehn outlined potential charges against Tom Schmidt and another partner.
  • When called to testify, Schmidt invoked his Fifth Amendment rights after prosecutors declined to grant him immunity for discussing internal emails with Tornado Cash developers.
  • Dragonfly managing partner Haseeb Qureshi says the firm obtained independent legal advice in 2020, fully cooperated with a 2023 DOJ subpoena, and never controlled Tornado Cash operations.
  • Legal experts warn that prosecuting investors for their portfolio companies’ conduct could chill venture capital support for privacy-preserving blockchain technologies.