Dragonfly Capital could possibly be the goal of federal expenses stemming from its early funding in Twister Money developer PepperSec, Inc., however the enterprise agency says it’s ready to “vigorously defend” itself if prosecutors pursue the case.
In a Friday social media put up, Dragonfly Capital managing companion Haseeb Qureshi defended the agency’s early backing of Twister Money — an open-source protocol that enables customers to obscure blockchain transactions — courting again to August 2020.
“We made this funding as a result of we imagine within the significance of open-source privacy-preserving expertise,” mentioned Qureshi, including that the corporate had consulted outdoors authorized counsel earlier than investing and was assured Twister Money was compliant.
Regardless of this authorized opinion, Twister Money builders Roman Storm and Roman Semenov had been charged with cash laundering and sanctions violations by the US Lawyer’s Workplace for the Southern District of New York in August 2023.
Storm’s felony trial is underway in New York, the place he faces federal expenses that might end in greater than 40 years in jail.
On Friday, prosecutors indicated they could pursue expenses in opposition to Dragonfly for its funding within the Twister Money workforce 5 years in the past.
“We imagine the federal government’s assertion in court docket right this moment was primarily to undermine a protection of Twister Money,” Qureshi mentioned, including that bringing expenses in spite of everything this time can be “outrageous.”
“We don’t imagine the DOJ would really deliver such absurd and groundless expenses. But when they do, we intend to vigorously defend ourselves,” he added.
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Devs declare Twister Money was a privateness device, however prosecutors don’t purchase it
Twister Money’s builders described the platform as a decentralized, non-custodial privateness device that enabled customers to ship and obtain digital belongings with out revealing their pockets historical past.
Sometimes called a “mixer,” it pooled cryptocurrencies from a number of customers earlier than redistributing them, successfully breaking the direct hyperlink between sending and receiving addresses.
In 2022, the US Treasury Division’s Workplace of Overseas Property Management (OFAC) sanctioned Twister Money, alleging it facilitated multibillion-dollar cash laundering, supported cybercrime and posed a menace to nationwide safety. The device was additionally accused of obfuscating illicit transactions.
Regardless of sanctions and. felony investigations, Twister Money noticed a resurgence in 2024. Knowledge from Flipside Crypto confirmed $1.9 billion in deposits in the course of the first six months of that yr.
Associated: Choose permits testimony on ‘possible’ Twister Money code adjustments