{"id":38878,"date":"2025-07-25T22:16:59","date_gmt":"2025-07-25T22:16:59","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=38878"},"modified":"2025-07-25T22:16:59","modified_gmt":"2025-07-25T22:16:59","slug":"doj-considering-criminal-charges-against-dragonfly-capital-employees-for-years-old-tornado-cash-investments","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=38878","title":{"rendered":"DOJ Considering Criminal Charges Against Dragonfly Capital Employees for Years-Old Tornado Cash Investments"},"content":{"rendered":"
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NEW YORK \u2014\u00a0Prosecutors told a federal judge in open court on Friday that they were considering criminally charging certain employees of crypto venture capital firm Dragonfly Capital, including general partner Tom Schmidt, for their 2020 investment into privacy tool Tornado Cash.<\/p>\n<\/p>\n

The discussion between prosecutor Nathan Rehn and District Judge Katherine Polk Failla of the Southern District of New York (SDNY) came amid a break in the ongoing trial of Tornado Cash developer Roman Storm<\/a>, who has been charged with conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business and conspiracy to violate international sanctions for his work with the privacy tool \u2014 charges for which, if found guilty, he faces up to 45 years in prison.<\/p>\n<\/p>\n

During their case<\/a>, the prosecution introduced a slew of messages between Storm and two Dragonfly Capital partners, Schmidt and managing partner Haseeb Qureshi. In the context of the government\u2019s case, the messages seemed to serve several purposes: to establish proper venue in New York (because Schmidt is based in Manhattan), to show that Storm and his colleagues profited from Tornado Cash and to show that they made frequent changes to the front end, or user interface, of the product.<\/p>\n<\/p>\n

However, when Storm\u2019s defense team raised the possibility of asking Schmidt to testify \u2014\u00a0likely to provide context for his and Storm\u2019s messages and to explain the firm\u2019s rationale for investing in Tornado Cash \u2014\u00a0prosecutors declined to grant Schmidt (as well as potentially another of the defense\u2019s would-be witnesses) immunity from his testimony being used against him in a future prosecution, prompting Schmidt to plead the fifth<\/a> and decline to testify in Storm\u2019s defense.<\/p>\n<\/p>\n

\u201cAre you looking at possibly prosecuting everyone at Dragonfly?\u201d Failla asked Rehn on Friday.<\/p>\n<\/p>\n

\u201cNot everyone, but Schmidt” and another individual, Rehn said, according to Inner City Press<\/a>.<\/p>\n<\/p>\n

The government then asked the judge to seal that portion of the transcript of the open-court discussion, which she agreed to do.<\/p>\n<\/p>\n

Qureshi took to X <\/a>on Friday to defend his firm\u2019s investment in Tornado Cash, writing:<\/p>\n<\/p>\n

\u201cWe believe deeply in Americans\u2019 right to privacy, and the lack of it remains one of crypto\u2019s largest unsolved problems. We therefore stand by our investment. We did not operate or exercise any control over Tornado Cash, we had no contact with any malicious users, we always encouraged our portfolio companies to follow the law, and we maintain that Tornado Cash itself has a lawful right to exist,\u201d Qureshi wrote. \u201cCharging a venture firm for a portfolio company\u2019s alleged misconduct would be unprecedented, especially under these circumstances.\u201d<\/p>\n<\/p>\n

Qureshi added that Dragonfly has \u201cfully cooperated\u201d with the government\u2019s investigation into Tornado Cash, which he said began in 2023.<\/p>\n<\/p>\n

\u201cAfter all of this time \u2014 years later \u2014\u00a0bringing charges against Dragonfly would be outrageous, contrary to the facts, and would induce a chilling effect onto all investment into crypto and privacy-preserving technologies in America,\u201d Qureshi said. \u201cWe don\u2019t believe the DOJ would actually bring such absurd and groundless charges. But if they do, we intend to vigorously defend ourselves.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

NEW YORK \u2014\u00a0Prosecutors told a federal judge in open court on Friday that they were considering criminally charging certain employees of crypto venture capital firm Dragonfly Capital, including general partner Tom Schmidt, for their 2020 investment into privacy tool Tornado Cash. The discussion between prosecutor Nathan Rehn and District Judge Katherine Polk Failla of the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-38878","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/38878","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=38878"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/38878\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=38878"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=38878"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=38878"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}