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Tag: Tornado Cash

  • Dragonfly Capital Launches $650M Crypto Fund Amid Market Turmoil

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    “In a space that is just completely flooded with bulls**t and with fakers and self-promoters, I think that has actually been a superpower.”

    Crypto venture capital firm Dragonfly Capital has closed its fourth fund at $650 million.

    The fund comes as the broader cryptocurrency market faces a severe downturn, with token prices declining and investor enthusiasm weakened.

    $650 Million Fund

    Dragonfly’s previous fund, its third, deployed $500 million into startups such as Polymarket, Rain, and Ethena. The new $650 million vehicle aims to continue that trajectory and will provide capital for the firm to pursue early-stage investments at a time when the crypto venture sector is experiencing a slowdown as deal activity declines and firms face challenges in raising additional capital from investors, according to Fortune.

    Speaking about the latest development, co-founder Haseeb Qureshi commented,

    “We talk out loud and we say what we think. In a space that is just completely flooded with bulls**t and with fakers and self-promoters, I think that has actually been a superpower.”

    The firm’s investments have included Layer 1 blockchain projects such as Avalanche, financial services firms like Amber Group, and other crypto projects. Besides, Dragonfly’s operations have continued through multiple market disruptions, such as the collapse of the Terra Luna ecosystem, the FTX bankruptcy, and a move away from China amid a local crypto crackdown.

    Scrutiny Linked to Tornado Cash Investment

    It has also faced regulatory scrutiny from the Department of Justice (DOJ). In July 2025, prosecutors informed a federal judge that they were considering criminal charges against employees of the crypto venture firm, including general partner Tom Schmidt, in relation to the 2020 investment in Tornado Cash.

    The statement was made by prosecutor Nathan Rehn to District Judge Katherine Polk Failla of the Southern District of New York during a break in the trial of Tornado Cash developer Roman Storm, who was later convicted of operating an unlicensed money transmission. Dragonfly co-founder Haseeb Qureshi clarified that the firm has fully cooperated with the government investigation, which began in 2023. He had then stated that if charges are filed, they intend to defend themselves.

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    The Justice Department later backtracked, and no charges were filed against Schmidt.

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    Chayanika Deka

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  • Bail Denied for Tornado Cash Dev Alexey Pertsev Amid Money Laundering Conviction Appeal

    Bail Denied for Tornado Cash Dev Alexey Pertsev Amid Money Laundering Conviction Appeal

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    A Dutch court has denied bail for Tornado Cash developer Alexey Pertsev, who was convicted of money laundering in May.

    This decision is a significant setback for Pertsev, who has been held in custody for the past two months without computer or internet access despite being requested in order to prepare for his defense.

    Pertsev Remains in Custody

    The Court of Appeal of ‘s-Hertogenbosch ruled that Pertsev will remain in custody as he prepares for his appeal. Despite his defense lawyers, Keith Cheng and Judith de Boer, arguing that Pertsev is not a flight risk and needs internet access to prepare his case, the court maintained that his detention would not hinder his ability to prepare his defense.

    While speaking to DL News, Cheng reportedly stated,

    “The court says that continuing his detention does not obstruct his possibility to prepare his defense.”

    De Boer, however, believes that in a case involving such fundamental legal questions, pre-trial detention is “unacceptable.” She went on to add,

    “This unprecedented case addresses when a software developer can be criminally liable for third-party misuse which will benefit the entire legal system.”

    Court Denied Computer Access

    At a hearing last month, Cheng revealed that he had outlined 18 points for Pertsev’s appeal that needed computer access, which was required by the court to process the request. However, to Cheng’s surprise, the request for the dev’s release from detention was denied.

    He had previously submitted a similar request to the prison where Pertsev is held, which was also turned down. The defense lawyer explained that providing a computer and other facilities would violate the prison’s safety policy. Despite presenting the prison’s refusal to the court, the appeal was unsuccessful.

    Authorities in Amsterdam arrested Pertsev in August 2022 for suspected involvement in hiding criminal funds and aiding money laundering by using the Ethereum decentralized mixing service. A Dutch judge at the Court of Appeal ‘s-Hertogenbosch found the 31-year-old Russian developer guilty for his role in the development of Tornado Cash in May this year and was sentenced to 64 months in prison.

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    Chayanika Deka

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  • Ethereum’s Vitalik Buterin Donates 30 ETH to Support Tornado Cash Devs’ Legal Defense

    Ethereum’s Vitalik Buterin Donates 30 ETH to Support Tornado Cash Devs’ Legal Defense

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    Ethereum co-founder Vitalik Buterin donated 30 ETH, valued at around $113,000, to support the legal defense of Tornado Cash developers Alexey Pertsev and Roman Storm through the decentralized fundraising platform Juicebox.

    According to the on-chain data, the transaction from an address linked to Buterin, named vitalik.eth, was made at 1:58 am EST on May 30 to the “Free Alexey & Roman” legal fund on Juicebox, which had raised 595.82 ETH, worth approximately $2.2 million.

    Open Source Is Not a Crime

    Crypto veterans, including Buterin, have consistently championed privacy tools for managing crypto assets privately. Buterin has published numerous papers on enhancing Ethereum’s privacy. Hence, his move is not surprising.

    Other supporters have shown solidarity by attaching messages of encouragement to their donations. Underneath their contributions, phrases like “you have our support,” “code is not guilty,” “support freedom,” and “Open source is a form of free speech that everyone deserves” resonate strongly.

    This isn’t the first time Buterin has donated to a similar cause. In 2022, he contributed 10 ETH (valued at $30,980 at the time) to a legal fund ‘AssangeDAO’ on Juicebox, supporting Australian activist and WikiLeaks founder Julian Assange.

    Legal Trouble for Tornado Cash Bosses

    Tornado Cash is a privacy-focused tool that facilitates anonymous crypto transactions. However, its potential for misuse has led to it being exploited by criminals to launder, hack, or steal funds. This illicit activity caught the attention of law enforcement, leading the US Treasury’s Office of Foreign Assets Control (OFAC) to impose sanctions on Tornado Cash in August 2022.

    Shortly thereafter, Tornado Cash developer Alexey Pertsev was arrested in Amsterdam for allegedly hiding criminal financial flows and facilitating money laundering through the controversial Ethereum mixing service.

    A year later, other developers – Roman Storm and Roman Semenov – were charged with aiding in laundering $1 billion, with Storm arrested in Washington State. Pertsev was sentenced to 5 years and 4 months in prison earlier this month.

    Meanwhile, Storm remains detained in the US since his arrest in 2023, with his trial scheduled for September.

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    Chayanika Deka

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  • 7 crypto court cases coming in 2024

    7 crypto court cases coming in 2024

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    Several crypto industry stakeholders have pending lawsuits in the U.S. and other jurisdictions following a busy year for government prosecutors and digital asset attorneys.

    2023 featured crypto’s largest court case to date coupled with a multi-billion dollar settlement between the industry’s largest exchange and several U.S. regulatory bodies. However, 2024 promises another series of court battles and crypto defendants arguing against illegal doings.

    The U.S. Securities and Exchange Commission (SEC) sued multiple crypto businesses in what some proponents termed a “regulation by enforcement” campaign against blockchain assets.

    According to SEC Chair Gary Gensler, the majority of these crypto assets qualify as securities and fall under the purview of existing financial policies. He views the ecosystem as rife with fraud and non-compliance.

    The Commodity Futures Trading Commission (CFTC) kept apace with Gensler’s SEC, fielding 47 lawsuits involving digital asset operators accused of fraud and running Ponzi schemes. Indeed, the CFTC recorded its largest-ever win after fining Cornelius Johannes Steynberg of Stellenbosch $3.4 billion.

    New cases are likely to emerge amid unresolved litigation and rolling enforcement action. These are the seven crypto cases to watch at press time.

    Binance

    Crypto’s largest exchange, Binance, reached a record-breaking $4.3 billion settlement with the CFTC, the U.S. Department of Justice, and the Treasury Department. Former CEO Changpeng Zhao also stepped down and pleaded guilty to at least one felony charge.

    However, the SEC is still suing Binance and was notably absent from the multi-agency resolution announced in November. The SEC said Binance broke securities laws by operating an unregistered exchange and offering illegal securities like the BUSD stablecoin, a joint venture with Paxos. 

    Richard Teng, the new Binance CEO, would lead the company through an SEC lawsuit and adjust to the monitorship agreed upon with authorities.

    Celsius

    The bankrupt crypto lender is accused of defrauding thousands of investors under the leadership of ex-CEO Alex Mashinsky. Mashinsky denied wrongdoing after his arrest in July and indictment on seven criminal charges. 

    His trial will begin in September while Celsius faces suits from the CFTC and the SEC. A third lawsuit filed by the Federal Trade Commission was settled.

    Coinbase 

    Like Binance, the SEC sued Coinbase in June. Coinbase allegedly failed to register its exchange and illegally provided staking-as-a-service to U.S. investors. Coinbase will square off with the securities watchdog in a Southern District Court of New York after denying the allegations. 

    The crypto exchange also saw its rule-making petition denied, although CEO Brian Armstrong said Coinbase would not give up. 

    FTX

    While FTX founder Sam Bankman-Fried was convicted on all seven charges, including fraud at his exchange and crypto trading firm Alameda Research, a second trial to address severed counts may be held. 

    Federal prosecutors could sue Bankman-Fried for unlawful political donations and bribing foreign government officials. A New York court is scheduled to sentence the fallen crypto mogul in March. This is the same time a second FTX trial may be pursued. Bankman-Fried’s bid for a delayed sentencing was already refused.

    Kraken

    Kraken pulled out of New York, but the SEC still has a case against the Jesse Powell-founded crypto exchange. The SEC accused Kraken of commingling customer funds and operating an unregistered securities exchange. Kraken promised to respond.

    David Ripley, Kraken CEO, said the company does not list securities, and the SEC does not have a regulatory structure to register compliant crypto firms.

    Ripple

    Ripple partial victory in a multi-year legal tussle with the SEC over XRP sales was considered a turning point by many in crypto. The SEC said Ripple’s XRP sales to institutional and retail investors broke securities laws. 

    Judge Analisa Torres ruled that XRP sales on exchanges were not unregistered securities, while institutional offerings were. Either side may appeal outcomes as negotiations are expected to decide possible penalties for Ripple based on sales to sophisticated investors.

    Tornado Cash

    The U.S. Treasury sanctioned Tornado Cash in August 2022 for allegedly enabling money laundering and other criminal activity. Co-founders of the Ethereum-based mixing service also face legal action. 

    Tornado Cash developers Roman Storm and Roman Semenov stand accused of sanctions evasion and aiding money laundering. Both defendants deny the charges, and Storm was arraigned in Manhattan court. 

    Another developer, Alexey Pertsev, spent nearly nine months in jail before his release in the Netherlands pending a trial in March.


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    Naga Avan-Nomayo

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  • BH Token stolen funds funneled into Tornado Cash

    BH Token stolen funds funneled into Tornado Cash

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    Funds stolen in a prior exploit have reportedly been channeled into Tornado Cash, totalling an estimated 1,500 BNB now within the mixer.

    Deposits into Tornado Cash

    According to an Oct. 11 from Certik, an exploit occurred on BH Token (BlackHole token), resulting in an exploiter (0xFDb) acquiring $1.2 million USDT, which was later converted to BNB and deposited into Tornado Cash, an Ethereum-based privacy tool.

    Now, in a follow-up development dated Oct. 19, the malicious actor responsible for the theft has channeled stolen funds into Tornado Cash, has deposited a total of 1,500 BNB into the mixing service so far. 

    A subject of another alert

    Unfortunately, this is not the first time that Tornado Cash has made headlines for being part of a malicious attack in recent weeks.

    On Sept. 11, another Certik alert went out about a wallet associated with over $24 million in stolen cryptocurrencies that had transferred 600 Ether (ETH) valued at approximately $936,000 into Tornado Cash.

    Earlier in August, Tornado Cash founders also faced charges for money laundering tied to North Korea.


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    Sarah Jansen

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