According to Haseeb Qureshi, co-founder and managing partner of Dragonfly, the U.S. Department of Justice is not investigating Dragonfly Ventures or its executives due to the venture capital firm's past investment in Tornado Cash.
Qureshi stated in a post on the X platform on Tuesday (July 29) that the Justice Department revealed during a trial on Monday that its investigation is not targeting Dragonfly. He wrote, "The Justice Department has now retracted its previous statements," and added:
"They officially stated during the trial on Monday morning that media reports about their plans to charge Dragonfly are inaccurate, and that neither Dragonfly nor any of its executives are targets of their investigation."
Qureshi also shared the trial record, where prosecutors indicated that "there are inaccuracies and misleading information in public reports regarding the government's stance on Dragonfly and certain of its executives."
On Friday, Justice Department prosecutors suggested that the agency might charge Dragonfly due to its investment in Tornado Cash developer PepperSec, Inc. in 2020.
In a follow-up post on the X platform, Qureshi called this suggestion "unprecedented" and a violation of Justice Department policy, arguing that speculating about third-party prosecutions in public is intended to prevent Dragonfly from testifying in defense.
Qureshi also defended Dragonfly's early support of Tornado Cash. "We made this investment because we believe in the importance of open-source privacy-preserving technology." He added that Dragonfly sought external legal counsel before the investment and was informed that Tornado Cash was compliant.
In 2022, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, accusing it of facilitating billions of dollars in money laundering, supporting cybercrime, and posing a threat to national security.
These sanctions were overturned earlier this year, and Tornado Cash users filed a civil lawsuit against OFAC.
Cointelegraph was unable to contact the Justice Department to confirm this matter.
Tornado Cash developers Roman Storm and Roman Semenov were charged in August 2023 with money laundering and sanctions violations. Storm's trial took place on July 14 in New York.
On Saturday, Storm issued an urgent appeal to raise an additional $1.5 million to cover skyrocketing legal fees as his high-profile cryptocurrency trial entered its third week. Storm has raised over $3.9 million from the crypto community, stating that costs are rising rapidly.
Related: BitMine's $1 billion buyback plan currently leans more towards stock rather than more Ethereum (ETH)
Original article: “U.S. Department of Justice (DOJ) Clarifies: Not Investigating Dragonfly Over Tornado Cash Investment”
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