Ethereum Researcher Pleads Guilty to Advising North Korea on How to Use Crypto to Evade Sanctions

Ethereum Researcher Pleads Guilty to Advising North Korea on How to Use Crypto to Evade Sanctions
Photo: INA FASSBENDER / AFP, Getty Images

An American cryptocurrency researcher has admitted to violating U.S. law by attending a blockchain conference in North Korea in 2019, where he gave advice on how to elude U.S. sanctions.

Virgil Griffith, 38, has pleaded guilty to conspiring to violate the International Emergency Economic Powers Act, which prohibits the export of goods, technology or services to North Korea by a U.S. citizen. He entered his plea in federal court in New York on Monday, right as he was set to face trial, with a jury selection imminent, the Wall Street Journal reports.

Griffith is perhaps best known for his work as a research scientist and developer at the Ethereum Foundation, the non-profit associated with the popular cryptocurrency Ether. He was also previously involved in a number of various tech ventures in business and academia, including the creation of a “dark web search engine,” according to his LinkedIn.

In April of 2019, Griffith travelled to North Korea for the “Pyongyang Blockchain and Cryptocurrency Conference,” where he gave a presentation on how blockchain technology and cryptocurrency could be used to skirt U.S. sanctions and launder illicit funds, according to a criminal complaint from that period. Griffith had previously “sought permission” from the U.S. State Department to attend the conference but his request was rejected. He attended anyway, travelling to the DPRK through China while apparently taking steps to obscure “proof of his travel.” He was arrested in Los Angeles later that year by the FBI.

Griffith’s plan reportedly involved facilitating cryptocurrency transactions between North and South Korea to elude American sanctions, the Justice Department has said.

The U.S. has often sought to use economic pressure against North Korea as a punishment for its failure to denuclearize. Critics have often characterised sanctions as ineffective, while others note that they may often add to the humanitarian crises within the country. Officials have said that Griffith’s actions could have potentially undermined the sanctions put into effect by the U.S.

“Virgil Griffith provided highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions,” said U.S. Attorney Geoffrey S. Berman at the time of the arrest. “In allegedly doing so, Griffith jeopardized the sanctions that both Congress and the president have enacted to place maximum pressure on North Korea’s dangerous regime.”

Griffith, who is scheduled to be sentenced in January, could face up to 20 years in prison. His attorney, Brian Klein, said Monday that the developer “is sincerely remorseful.”

“Setting aside what happened, he has made important contributions to society that we will raise with the court,” Klein said. “He also has many wonderful qualities, and no one should define him by this mistake.”