The U.S. Department of Justice is not investigating Dragonfly Ventures or its executives in connection with the firm’s past investment in Tornado Cash, according to Dragonfly co-founder and managing partner Haseeb Qureshi.
In a post on X Tuesday, Qureshi said the DOJ clarified during a trial on Monday that Dragonfly is not a target in its ongoing investigation. “The DOJ has now backtracked,” he wrote. “They have stated on the record in the trial Monday morning that the media reports suggesting they were planning to bring charges against Dragonfly were inaccurate, and neither Dragonfly nor any of its principals are targets in their investigation.”
Qureshi also shared portions of the court transcript, in which prosecutors acknowledged that “there has been inaccurate and misleading public reporting on the government’s position concerning Dragonfly and certain of its executives.”
DOJ Suggests Possible Dragonfly Involvement in Tornado Cash Case
On Friday, prosecutors from the U.S. Department of Justice suggested that the agency may consider bringing charges against Dragonfly for its 2020 investment in PepperSec, Inc., the developer behind Tornado Cash.
In response, Dragonfly co-founder Haseeb Qureshi took to X, calling the implication “unprecedented” and a breach of DOJ policy. He argued that publicly speculating about third-party prosecution was an attempt to discourage Dragonfly from testifying in the defense’s favor.
Qureshi also defended Dragonfly’s early support of Tornado Cash, stating, “We made this investment because we believe in the importance of open-source, privacy-preserving technology.” He noted that the firm consulted external legal counsel before investing and was assured the project complied with regulations.
Tornado Cash came under scrutiny in 2022 when the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned the platform, accusing it of enabling multibillion-dollar money laundering, supporting cybercriminal activity, and threatening national security.
Those sanctions were overturned earlier this year following a successful civil lawsuit filed by Tornado Cash users against OFAC.
Tornado Cash developers charged
Tornado Cash developers Roman Storm and Roman Semenov were indicted in August 2023 on charges related to money laundering and sanctions violations. Storm’s trial began on July 14 in New York.
As the high-profile case enters its third week, Storm issued an urgent call on Saturday for an additional $1.5 million to help cover escalating legal fees. He has already raised over $3.9 million from the crypto community but said the costs continue to climb rapidly.
