The US Department of Justice is not investigating Dragonfly Ventures or its executives over the venture company’s past investment in Tornado Cash, according to Haseeb Qureshi, Dragonfly’s co-founder and managing partner.
The DOJ reportedly revealed during a Monday trial that it is not targeting Dragonfly in its investigation, Qureshi said in a Tuesday post on X. “The DOJ has now backtracked,” he wrote, adding:
“They have stated on the record in the trial Monday morning that the media reports that 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 transcripts of the trial, where prosecutors said there “has been inaccurate and misleading public reporting on the government’s position concerning Dragonfly and certain of its executives.”
Related: Dragonfly responds to DOJ scrutiny over Tornado Cash investment, vows to ‘vigorously defend’ itself
DOJ hints at Dragonfly probe in Tornado Cash case
On Friday, DOJ prosecutors suggested the agency might pursue charges against Dragonfly for its 2020 investment in Tornado Cash developer PepperSec, Inc.
In a subsequent post on X, Qureshi called the suggestion “unprecedented” and a violation of DOJ policy, arguing that speculating on third-party prosecution in public was meant to prevent Dragonfly from testifying for the defense.
Qureshi also defended Dragonfly’s early backing of Tornado Cash. “We made this investment because we believe in the importance of open-source privacy-preserving technology.” He added that Dragonfly had sought outside legal counsel before investing and was assured that Tornado Cash was compliant.
In 2022, the US Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, alleging it facilitated multibillion-dollar money laundering, supported cybercrime and posed a threat to national security.
Those sanctions were overturned earlier this year after Tornado Cash users filed a civil action against OFAC.
Cointelegraph was unable to contact the DOJ for confirmation.
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Tornado Cash developers charged
Tornado Cash developers Roman Storm and Roman Semenov were indicted on charges of money laundering and sanctions violations in August 2023. Storm’s trial began on July 14 in New York.
On Saturday, Storm issued an urgent appeal for an additional $1.5 million to cover soaring legal fees as his high-profile crypto trial enters its third week. Storm, who has already raised over $3.9 million from the crypto community, said the costs are mounting quickly.
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