Dragonfly has confirmed that U.S. government is considering charges against the venture firm for its early support of Tornado Cash, a decentralized mixing service in the center of an ongoing legal dispute.
“Dragonfly invested into PepperSec, Inc., the developers of Tornado Cash, in August of 2020,” Dragonfly Ventures co-founder Haseeb Qureshi said on X. “We made this investment because we believe in the importance of open-source privacy-preserving technology.”
“The government has now stated in open court that they are contemplating charges against Dragonfly for having invested into the Tornado Cash team in 2020,” he continued.
The news comes in the mid of an ongoing lawsuit against Roman Storm, one of the co-founders of Tornado Cash, a cryptocurrency mixer designed to hide to origin Ethereum-based assets. Storm faces charges of conspiracy to commit money laundering and sanctions violations.
The U.S. government attempted to shutdown Tornado Cash in August 2022 through sanctions. These sanctions were largely lifted in 2025.
Storm’s lawyers unsuccessfully argued for a mistrial after evidence emerged that their first witness did not interact with the Tornado Cash protocol.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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