For attending a conference and supporting North Korea in using blockchain technology in violation of US economic sanctions, Virgil Griffith, a former Ethereum (ETH) engineer, has been sentenced to 63 months in jail and will pay a fine of $100,000.
The decision was made by U.S. District Judge Kevin Castel of the Southern District of New York on Tuesday, April 12. “What you see here is intentionality, a conscious, willing intent to breach the sanctions regime,” Judge Castel said, adding that Griffith’s “desire to instruct individuals on how to avoid sanctions” made the crime worse.
Griffith pleaded guilty in September 2021 to conspiring to violate the International Emergency Economic Powers Act, which prohibits U.S. citizens from exporting “goods, services, or technology to the DPRK (North Korea) without first obtaining a license from the Department of the Treasury, Office of Foreign Assets Control (OFAC).”
Griffith was unable to obtain authorization to travel to North Korea from US authorities in early 2019, but he traveled nonetheless in April for the “Blockchain and Cryptocurrency Conference” in Pyongyang.
He presented presentations at the conference, dressed as a North Korean, about how the country could utilize cryptocurrencies to circumvent sanctions and launder money.
He also demonstrated how smart contracts may be used to aid the country in nuclear weapons talks with the United States.
Griffith’s defense team presented evidence of reasons that may have caused him to act irrationally in an attempt to reduce his sentence. Griffith was diagnosed with Obsessive Compulsive Personality Disorder (OCPD) and Narcissistic Personality Disorder, according to a clinical assessment (NPD).
Griffiths’ defense team said that his diagnosis of OCPD and NPD explained his “obsession” with North Korea and was possibly the reason he ignored warnings from friends, family, and the government about his trip to the country.
Griffith was given the opportunity to speak at the court, expressing regret for his acts and noting that the sanctions imposed on Russia as a result of the invasion of Ukraine had “shown their worth” and that he had been “cured” of his “obsession with North Korea.”
The court was not persuaded that he was remorseful. So, Judge Castel says:
“The fact of the matter is Virgil Griffih hoped to come home as a crypto hero,”
” to be admired and praised for standing up to government sanctions, for his fearlessness and nobility.”
Griffith was arrested by the FBI in November 2019, a few months after returning from the conference. Prior to his arrest, he met with the Bureau several times to discuss his trip, even providing them with photos of himself giving presentations at the conference.
North Korea has gotten more skilled in its use of Bitcoin, both to evade sanctions and to steal millions of dollars through hacks and attacks.
According to a research released in January by Chainalysis, North Korean hackers stole approximately $400 million in 2021 through exchange breaches and ransomware, using a complex laundering system combining decentralized exchange swaps and several crypto tumblers.
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