DOJ Drops Potential Charges Against Dragonfly Over Tornado Cash Links

The US Department of Justice has clarified it will not pursue charges against Dragonfly Ventures for its early investment in Tornado Cash, a crypto-mixing protocol under legal scrutiny. This follows earlier speculation that the venture capital firm could face prosecution due to its 2020 backing of the project.

Dragonfly co-founder Haseeb Qureshi confirmed the DOJ's updated stance, noting prosecutors retracted prior claims during a Monday trial session. The agency stated neither Dragonfly nor its executives are targets in any ongoing Tornado Cash investigation.

The reversal comes after unusual public comments from the DOJ on Friday suggesting potential prosecution—a MOVE Qureshi criticized as violating guidelines against courtroom speculation. "This type of statement could chill investment in blockchain and privacy technologies," he warned.