Dragonfly Capital Faces Potential Charges Over Tornado Cash Ties, Vows to Fight Back

Key Points

1. Dragonfly Capital invested in PepperSec, Inc., the developer of Tornado Cash, in 2020, believing in the importance of open-source privacy-preserving technology.

2. Managing partner Haseeb Qureshi stated that legal counsel at the time found no regulatory red flags regarding the investment.

3. The U.S. government has cracked down on Tornado Cash, charging developers Roman Storm and Roman Semenov with money laundering and violating sanctions.

4. Tornado Cash was sanctioned by the U.S. Treasury’s OFAC in 2022, but some addresses were later removed from the sanctions list following a court ruling.