Dragonfly Capital might quickly discover itself within the crosshairs of U.S. prosecutors over its 2020 funding in Twister Money developer PepperSec, Inc., the agency behind the now-sanctioned crypto privateness protocol.
Key Takeaways:
- Dragonfly Capital might face authorized scrutiny over its 2020 funding in Twister Money developer PepperSec.
- Managing accomplice Haseeb Qureshi defended the transfer, citing authorized assurances.
- Twister Money continues to course of excessive volumes.
The enterprise capital agency signaled Friday that it might push again arduous if formal fees are filed.
In a assertion on social media, Dragonfly managing accomplice Haseeb Qureshi defended the funding, stressing that it was made in good religion after receiving authorized assurances of compliance.
“We made this funding as a result of we imagine within the significance of open-source privacy-preserving know-how,” Qureshi wrote. He added that authorized counsel on the time discovered no regulatory purple flags.
US Crackdown on Twister Money Sparks Crypto Privateness Debate
The controversy stems from the US authorities’s crackdown on Twister Money, a device that permits customers to obscure the origin and vacation spot of crypto transactions.
Although the protocol was pitched as a decentralized privateness enhancer, it grew to become a favourite amongst hackers and sanctioned entities looking for to cover digital footprints.
In 2023, the Division of Justice charged builders Roman Storm and Roman Semenov with cash laundering and violating U.S. sanctions.
Storm’s trial is at present underway in New York and will lead to a decades-long jail sentence. On Friday, prosecutors urged Dragonfly itself may very well be subsequent.
Qureshi dismissed the notion as an intimidation tactic. “We imagine the federal government’s assertion in court docket at the moment was primarily to undermine a protection of Twister Money,” he mentioned. “Bringing fees now could be outrageous.”
Twister Money has remained a authorized and moral flashpoint within the debate over privateness and regulation in crypto.
Its sanctioning by the U.S. Treasury’s OFAC in 2022 was a landmark second, with authorities alleging it facilitated billions in illicit transactions, together with funds tied to North Korean hackers.
Regardless of the sanctions, Twister Money has proven stunning resilience. Flipside Crypto reported $1.9 billion in deposits via the platform within the first half of 2024, indicating continued demand for anonymity instruments in blockchain transactions.
No Remaining Ruling Wanted After Twister Money Faraway from Sanctions Listing
In March, the US Treasury Division argued that no additional court docket ruling is important within the authorized battle over its sanctioning of crypto mixer Twister Money, citing its latest removing of the platform and related addresses from the sanctions record.
As reported, a developer has ported Twister Money to the MegaETH blockchain’s public testnet, enabling personal transactions on the high-performance community.
MegaETH, which just lately launched, boasts a throughput capability of as much as 20,000 transactions per second.
The developer, recognized pseudonymously as Gunboats, mentioned the thought was sparked by the U.S. Treasury’s latest removing of Twister Money addresses from the OFAC sanctions record, following a court docket ruling earlier this yr.
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