North Korea-obsessed Ethereum dev gets 5 years for breaking sanctions

North Korea-obsessed Ethereum dev gets 5 years for breaking sanctions

Virgil Griffith (an ex-ETH developer) has been sentenced for 63 months and will pay a $100,000 fine for attending a conference to help North Korea use blockchain technology. This is in violation of the economic sanctions imposed on him by the United States.

The decision was handed down by U.S. District Judge Kevin Castel of New York’s Southern District on Tuesday, April 12. Judge Castel stated that what you see was intentionality, a willful, deliberate intent to violate sanctions’ regime.” He also said that Griffith wanted to “educate people about how to avoid sanctions.”

Griffith pleaded guilty in September 2021 to conspiring to violate the International Emergency Economic Powers Act. This law prohibits U.S citizens from exporting “goods or services to the DPRK” (North Korea), without a license from the Department of the Treasury Office of Foreign Assets Control.

Griffith failed to get permission from the US authorities to travel into North Korea in the early part of 2019, but he did go to Pyongyang in April for the “Blockchain and Cryptocurrency Conference”.

He presented at the conference in a North Korean suit, explaining how the country could use cryptocurrency to avoid sanctions and launder cash. He also showed methods for how smart contracts can be used to benefit North Korea in nuclear weapons negotiations.

Griffith’s defense team presented evidence that Griffith may have acted irrationally in an effort to reduce his sentence. Griffith was diagnosed with Obsessive Compulsive Disorder (OCPD), and Narcissistic Personality disorder (NPD) according to a psychological evaluation.

His defense team stated that the diagnosis of OCPD/NPD explained Griffiths’ “obsession” with North Korea. This could have been what led to him to ignore warnings from friends, family and the government about unsanctioned travel into the country.

Related: FBI arrests Virgil Griffith, firsthand for violating sanctions

Griffith spoke at the hearing. He stated that he regretted his actions and said that the sanctions against Russia due to the invasion in Ukraine had “shown them their value” as well as his “cure” for his “obsession” with North Korea.

The court was not convinced Griffith was regrettable, and Judge Castel stated:

“Virgil Griffih hoped that he would return home as a crypto hero. He will be admired for standing up against government sanctions and for his nobility and fearlessness.”

Griffith was detained by the FBI in November 2019. He returned from the conference in October 2019, and had many meetings with them about his trip. He even provided photographs of himself giving presentations to the Bureau.

North Korea is becoming more sophisticated in its use of cryptocurrency, both to evade sanctions and to exploit hacks and exploits in order to steal millions of US dollars.

Chainalysis released a January report that revealed that North Korean hackers had stolen nearly $400 million in ransomware and exchange hacks. They also employed a sophisticated laundering system, which included multiple crypto tumblers and decentralized exchange swaps.

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