DOJ Targets Dragonfly Capital Staff Over Historic Tornado Cash Ties – Crypto Privacy Under Fire

Federal prosecutors are circling Dragonfly Capital like sharks smelling blood in the water. The DOJ's latest move? Criminal charges against employees for their role in funding Tornado Cash years ago—a mixer that became regulators' public enemy number one.

Privacy tech or money laundering 2.0?

The investigation centers on whether Dragonfly's early investments crossed the line from supporting privacy tech to enabling financial opacity. Sources suggest prosecutors are dusting off old transaction records, trying to pin intent on executives who bet on the wrong horse.

Crypto's compliance reckoning hits home

This isn't just about one fund—it's a shot across the bow for VCs who backed privacy tools before they became politically toxic. The timing reeks of regulatory theater, coming just as Congress debates new surveillance powers over decentralized finance.

Bonus jab: Nothing gets the SEC harder than chasing after deals that already lost money for investors.