Prosecutors Admit Error After Attempt to Intimidate Dragonfly Over Tornado Cash Investment

ccn.comPublicado em 2025-07-02Última atualização em 2025-07-30

Key Takeaways

During the trial of Roman Storm, prosecutors suggested they were considering charges against Dragonfly Partner Tom Schmidt.
Schmidt had previously been planning to testify in Storm’s defense.
Following widespread outrage, the Justice Department backtracked on Monday, July 29.

In a chilling example of prosecutorial overreach, on Friday, July 25, a U.S. attorney working on the case against Roman Storm allegedly told the judge that they were weighing charges against a general partner at Dragonfly Capital, which invested in Tornado Cash.

Upon returning to court on Monday, the government’s lawyers walked back their previous statement, emphasizing that neither Dragonfly nor any of its employees is under investigation.

DOJ Considers Criminal Charges Against Dragonfly Employees

During Friday’s open court session, Storm’s lawyer said they had planned to call Dragonfly Partner Tom Schmidt to the witness stand. However, the lawyer said Schmidt had chosen to invoke the Fifth Amendment, which protects individuals from being compelled to incriminate themselves.

In response, Judge Katherine Polk Failla asked the government’s lawyers if they planned to prosecute Dragonfly employees.

“Not everyone, but Schmidt,” prosecutor Nathan Rehn replied.

Although the comments were removed from the record, it was too late for prosecutor Nathan Rehn to walk back his comments, which were live tweeted from the courtroom by Inner City Press.

DoJ Accused of Courtroom Bullying

To many observers of the trial, Rehn’s comments looked a lot like the Justice Department bullying a potential witness.

“We believe the government’s statement in court today was primarily to undermine a defense of Tornado Cash—to make it more difficult for the defense to call Tom to testify on the stand,” Dragonfly Partner Haseeb Qureshi tweeted on Friday.

“Prosecutors did this to prevent us from testifying for the defense,” he added in another post .

Government Walks Back Dragonfly Threat

After Rehn’s comments prompted a media furor and outrage among Storm’s supporters, on Monday, U.S. attorneys clarified that Schmidt is not under investigation.

“The DOJ has now backtracked,” Qureshi said in a post on X.

“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.”

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