Key Takeaways 🧠
DOJ has backtracked on last week’s reports that it would bring charges against crypto VC Dragonfly for supporting Tornado Cash. 🧨
The U.S. Department of Justice (DOJ) has clarified it is not pursuing charges against crypto venture capital firm Dragonfly over its investment in Tornado Cash. Because nothing says “justice” like a sudden change of heart. 🌀
In a statement, Thane Rehn, Federal Prosecutor and Assistant U.S. Attorney, said recent media reports were “inaccurate and misleading.” Because nothing says “transparency” like a press release that’s more confusing than a quantum physics textbook. 📚
He added, 🤷♂️
“The government wants the record to be clear that it has not identified Dragonfly or any of its directors, officers, employees, or controlling investors as targets of its investigation.”
Dragonfly slams DoJ 🤬
The DoJ’s U-turn followed Dragonfly’s pledge to fight and stand by its investment in Tornado Cash should the justice system proceed with the reported threat of charges. Because who needs a fair trial when you can have a drama-filled courtroom showdown? 🎭
The controversy arose after DOJ prosecutors hinted in open court that Dragonfly could face charges simply for backing an open-source privacy protocol. Because nothing says “fairness” like threatening investors for supporting a tool that’s basically a digital equivalent of a secret handshake. 🤫
In fact, the comment followed a last-minute conference involving Dragonfly partner Tom Schmidt, who had been approached to testify in Roman Storm’s ongoing trial. Because nothing says “legal process” like a last-minute meeting that feels more like a spy movie. 🕵️♂️
Hasseeb Qureshi, managing partner at the VC firm, welcomed the move but maintained that last week’s ‘threat’ was a ‘clear violation of DoJ policy.’ Because nothing says “professionalism” like a government agency threatening investors in public. 🗣️
“The DOJ’s public statements on Friday in open court—that Dragonfly, as investors, could face prosecution merely for backing an open-source privacy technology—was not only unprecedented, it was a clear violation of DOJ policy.”
Qureshi said the DOJ used the veiled threat to discourage them from defending Storm. Because nothing says “justice” like bullying investors into silence. 🤭
“They (DoJ) are never allowed to speculate on prosecuting a third party in open court in front of the media. The prosecutors did this to prevent us from testifying for the defense.”
What’s at stake 🧩
The incident sparked broader concerns across the tech and crypto communities. In fact, this case would be unprecedented if the DOJ had gone after the financial backers of crypto protocols. Because nothing says “innovation” like suing investors for supporting open-source software. 🤔
Qureshi added,
“Its outcome will have massive implications for open-source software and privacy rights in America. We are hopeful that the American judicial system will get this right.”
The U.S. removed Tornado Cash from its sanctions list in early 2025 after accusing North Korean hackers of using it to launder funds. Because nothing says “security” like removing a tool from a list only to later threaten its backers. 🛡️
But regulators have not cleared its developers, including Storm. Their legal fate could be decided as soon as this week. Because nothing says “fairness” like dragging a trial out until the last possible moment. ⏳
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2025-07-29 12:23