American Citizen Arrested For Educating North Korea On Blockchain And Crypto

Today United States prosecutors announced the arrest of Virgil Griffith, who allegedly traveled to the Democratic People’s Republic of Korea (DPRK) to deliver a presentation on how to use cryptocurrencies and blockchain technology to circumvent sanctions. American Citizen Arrested For Educating North Korea On Blockchain And Crypto

According to the November 29 announcement, the 36-year-old Griffith was arrested at the Los Angeles International Airport, and will be charged with conspiring to violate the International Emergency Economic Powers Act (IEEPA).

The Charges Carry A Maximum Term Of 20 Years In Prison. U.S. Attorney Geoffrey S. Berman Stated:

“As Alleged, 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. 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.”

The IEEPA prohibits any U.S. citizens from exporting any goods, services, or technology to the DPRK without a license from the Department of the Treasury, Office of Foreign Assets Control.

Griffith, a U.S. citizen living in Singapore, was previously denied permission to travel to the DPRK by the U.S. Department of State. Griffith went against the decision and presented at the DPRK Cryptocurrency Conference, violating the U.S. sanctions against the DPRK. FBI Assistant Director-in-Charge William F. Sweeney Jr. said:

“There are deliberate reasons sanctions have been levied on North Korea. The country and its leader pose a literal threat to our national security and that of our allies. Mr. Griffith allegedly traveled to North Korea without permission from the federal government, and with the knowledge of what he was doing was against the law. We cannot allow anyone to evade sanctions, because the consequences of North Korea obtaining funding, technology, and information to further its desire to build nuclear weapons put the world at risk. It’s even more egregious that a U.S. citizen allegedly chose to aid our adversary.”

North Korea Trying To Evade Sanctions

North Korea is reportedly in the early stages of developing a cryptocurrency to help the DPRK evade international sanctions and find a way around “the U.S.-dominated global financial system.”

Alejandro Cao de Benos, the official in charge of North Korea’s crypto conferences, said at the time that the digital currency will be similar to Bitcoin (BTC) but that they are still in the very early stages in the creation of the token and that there are “no plans to digitize the [North Korean] won for now.”

Updated: 12-2-2019

Vitalik Buterin Supports Petition to Free Arrested Blockchain Dev

Ethereum (ETH) co-founder Vitalik Buterin has declared his solidarity with Virgil Griffith, the American citizen arrested for his blockchain educational activities in North Korea.

In a tweet posted on Dec. 1, Vitalik shared a link to a blog post penned by blockchain firm CEO Enrico Talin, which had appealed directly to the Ethereum co-founder to start a petition in support of Griffith.

“Let’s not have another Aaron Swartz martyr in our hands,” Talin had written, in reference to the hacker and political activist who killed himself in 2013 ahead of a high-profile federal trial.

Buterin: “Geopolitical Open-Mindedness Is A *Virtue*”

Griffith, a 36-year old U.S. citizen living in Singapore, was arrested at the Los Angeles International Airport on Nov. 29 and is set to be charged with conspiring to violate the International Emergency Economic Powers Act (IEEPA).

The U.S. Department of Justice has accused Griffith of providing “highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions.”

Griffith is alleged to have illegally traveled to the Democratic People’s Republic of Korea (DPRK) to deliver a conference presentation — entitled “Blockchain and Peace” — on cryptocurrencies and blockchain.

In declaring his support of Griffith, Buterin prefaced his arguments by disclosing a “conflict-of-interest” insofar as Griffith is a friend of his. He also underscored that the Ethereum Foundation had provided no assistance to his trip and was not affiliated with Griffith’s personal decision — one that, Buterin claims, “many counseled against.” This notwithstanding, he wrote:

“Geopolitical open-mindedness is a *virtue*. It’s *admirable* to go to a group of people that one has been trained since childhood to believe is a Maximum Evil Enemy, and hear out what they have to say. The world would be better if more people on all sides did that.”

Buterin further states that he does not believe Griffith gave the DPRK “any kind of real help in doing anything bad” — having only purportedly delivered a presentation based on already publicly accessible, open-source software. “There was no weird hackery “advanced tutoring,” Buterin contends, further arguing that “Virgil made no personal gain” from his visit.

Community Ambivalence

Buterin’s arguments met a mixed response on Crypto Twitter, with some pointing to Griffiths’ decision to travel to the DPRK despite allegedly having been denied permission to do so by the State Department. One noted that — whether open-source or not — sophisticated code requires considerable skill and proficiency to serve as the basis of successful implementation.

As previously reported, North Korea is rumored to be in the early stages of developing a cryptocurrency that would enable it to circumvent international sanctions.

Updated: 12-2-2019

Virgil Griffith to Be Released From Jail Pending Trial

A judge ruled that the U.S. Department of Justice has enough evidence to move a case against ethereum developer Virgil Griffith to trial.

Griffith, who was arrested in Los Angeles on Thanksgiving Day on charges of conspiracy to assist the Democratic People’s Republic of Korea (DPRK) in learning more about cryptocurrency for its own benefit, had a preliminary court hearing Monday to determine whether the DOJ had sufficient evidence to establish probable cause.

The U.S. Attorney’s Office of the Southern District of New York said Friday that he had been charged with “violating the International Emergency Economic Powers Act (IEEPA) by traveling to the Democratic People’s Republic of Korea (DPRK or North Korea) in order deliver a presentation and technical advice on using cryptocurrency and blockchain technology to evade sanctions.”

According to Friday’s complaint, Griffith asked for – and was denied – permission to travel to North Korea in order to give the presentation, titled “Blockchain and Peace.” Moreover, the complaint said, Griffith subsequently “began formulating plans to facilitate the exchange of Cryptocurrency-1 between the DPRK and South Korea,” despite knowing that this would violate U.S. sanctions against the DPRK.

Following the hearing Monday afternoon, Brian Klein of Baker Marquart, who is representing Griffith, said in a statement that the developer will be released from jail after bond is posted.

He added:

“We are very pleased that today the judge found that Virgil should be released from jail pending trial. We dispute the untested allegations in the criminal complaint. Virgil looks forward to his day in court, when the full story can come out.”

Klein has represented a number of high-profile individuals in the cryptocurrency and cybersecurity worlds, including bitcoin entrepreneur Charlie Shrem and security researcher Marcus Hutchins.

Klein negotiated a settlement against Cameron and Tyler Winklevoss, who sued Shrem in November 2018 alleging he owed them $26 million in bitcoin. Hutchins, who was accused of creating the Kronos malware by U.S. authorities, pleaded guilty and was sentenced to a year of supervised release, with the judge in the case recommending he apply for a pardon.

Updated: 12-3-2019

Former Charlie Shrem Attorney to Represent Arrested Ethereum Dev

Renowned trial attorney Brian Klein has revealed he will represent Virgil Griffith, the developer recently arrested for participating in a blockchain conference in North Korea.

In a tweet posted on Dec. 3, Klein stated that his client disputes the “untested allegations in the criminal complaint” and had been temporarily released from jail pending his trial.

Klein: Griffith “Looks Forward To The Full Story” Coming Out

Klein — who has previously represented the likes of Charlie Shrem and Erik Voorhees — is a former federal prosecutor who currently works as a criminal and regulatory defense attorney at United States law firm Baker Marquart.

He has extensive experience with technology cases and chairs the American Bar Association’s blockchain, digital currency and ICO national institute, his staff profile indicates.

As reported, Griffith — a 36-year old American citizen living in Singapore — was arrested at the Los Angeles International Airport on Nov. 29 and is being charged with conspiring to violate the International Emergency Economic Powers Act or IEEPA.

Griffith had traveled to the Democratic People’s Republic of Korea (DPRK) to deliver a conference presentation, entitled “Blockchain and Peace,” despite allegedly having been denied permission to do so by the U.S. State Department.

The U.S. Department of Justice has charged Griffith with providing “highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions.”

In his tweet, Klein has welcomed the ruling to release Griffith from jail pending his forthcoming trial, adding that his client “looks forward to his day in court, when the full story can come out.”

Vitalik Buterin Pledges His Support

Ethereum (ETH) co-founder Vitalik Buterin has declared his solidarity with Griffith, stating he believes that “geopolitical open-mindedness is a *virtue*” and that he does not believe Griffith gave the DPRK “any kind of real help in doing anything bad.”

Buterin has supported a change.org petition to release the developer, which has 50 signatures by press time.

Updated: 12-27-2019

No Bail For Ethereum Researcher Turned North Korea Advisor Following Incriminating Texts

Ethereum Foundation researcher Virgil Griffith has reportedly been denied bail in New York. Currently detained, Griffith is appealing the action.

“Griffith was presented yesterday and ordered detained,” James Margolin, the chief public information officer for the U.S. Attorney’s Office in Southern District of New York, told Cointelegraph in an email on Dec. 27.

“He is appealing and there will be [a] hearing before Judge Broderick,” Margolin said, naming Jan. 9 as the preliminary hearing date.

The U.S. District Court for the Southern District of New York (SDNY) rejected the option of bail for Griffith, a report from Inner City Press detailed on Dec. 26.

Griffith first faced arrest on Nov. 28 for allegedly traveling to North Korea to provide education on dodging sanctions via blockchain and crypto, Cointelegraph reported at the time. According to the state department’s allegations, Griffith’s actions breached the International Emergency Economic Powers Act (IEEPA).

Charges against Griffith could potentially land him up to 20 years in jail.

Griffith allegedly disowned his status as an American national via text messages to family members, according to texts quoted by the U.S. Attorney’s office, accorded to Inner City Press, who were by their own account alone with Griffith’s parents in the audience at the court appearance. Griffith’s texts also allegedly included intent to facilitate money laundering activities in North Korea.

Griffith’s lawyer, last name Buckley, also reportedly provided inconsistent details during pre-trial proceedings, noting that Griffith both owned and rented a dwelling in Puerto Rico, explaining that cryptocurrency activities are increasing on the island.

Cointelegraph also reached out to Griffith’s lawyer, Brian Klein, for comment, but received no responses as of press time. This article will be updated if new information comes in.

In September, Cointelegraph reported on North Korea’s desire to create its own national crypto asset.

Updated: 12-31-2019

$1M Bond To Keep Alleged North Korea Sanctions Violater Griffith In Alabama For Now

After having been denied bail on Dec. 26, Ethereum foundation researcher Virgil Griffith has now been released on a $1 million bond on the condition that he stay out of California.

On Dec. 30, the Inner City Press reported that the 36-year-old Griffith has been released after a bail appeal hearing earlier today. The hearing took place in front of United States District Court for the Southern District of New York Judge Vernon S. Broderick, who granted a $1 million bail and ordered Griffith released, on the condition that he stay with his parents in Alabama for “moral suasion.”

Despite the fact that Griffith attempted to procure a St. Kitts passport, the bail conditions allow for Griffith to use his passport card to travel to countries such as Canada, Mexico and certain regions of the Carribean including St. Kitts and Nevis. He will also be able to use email to stay in touch with his lawyers. The $1 million bond is reportedly secured by relatives’ homes.

Arrested For Educating North Korea On Crypto And Blockchain

Griffith was first arrested on Nov. 28 for reportedly traveling to the Democratic People’s Republic of Korea (DPRK) to deliver a presentation on how to dodge sanctions via cryptocurrencies and blockchain technology.

Griffith was charged with conspiring to violate the International Emergency Economic Powers Act (IEEPA), which carries a maximum term of 20 years in prison. U.S. Attorney Geoffrey S. Berman said at the time:

“As alleged, 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. 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.”

Denied Bail At First

On Dec. 27, a public information officer for the SDNY told Cointelegraph that Griffith was denied bail and ordered detained.

Griffith also allegedly disowned his status as an American national via text messages to family members, according to texts quoted by the U.S. Attorney’s office. Griffith’s texts also allegedly included intent to facilitate money laundering activities in North Korea.

Updated: 1-9-2020

Ethereum Developer Virgil Griffith Indicted Over North Korea Event Appearance

Ethereum developer Virgil Griffith has been indicted over allegations relating to a conference appearance in North Korea last April.

In a court document filed in the Southern District of New York on Jan. 7 (see below), Griffith is charged by a grand jury with one count of conspiracy to violate the International Emergency Economic Powers Act.

The defendant and others had conspired to breach the prohibitions of the act when Griffith provided services to the Democratic People’s Republic of Korea without obtaining approval from the U.S. Treasury’s Office of Foreign Asset Control, according to the indictment. The developer is also alleged to have attempted to evade U.S. legal requirements during his actions.

The document adds that one or more of the alleged co-conspirators is expected to be brought to New York and arrested.

Griffith was arrested on Thanksgiving for allegedly attending a cryptocurrency conference hosted by the North Korean government and sharing his expertise in using cryptocurrency.

According to a complaint brought against Griffith on Nov. 21, he had sought approval to attend the conference, which was denied. He then traveled to the conference anyway.

“Despite receiving warnings not to go, Griffith allegedly traveled to one of the United States’ foremost adversaries, North Korea, where he taught his audience how to use blockchain technology to evade sanctions,” John Demers, an assistant attorney general for national security, said at the time.

After the indictment was released, prosecutors requested that Griffith be sent to his parents in Alabama immediately after being released on bond, rather than be allowed to stay in a New York hotel room until his arraignment. They also asked that Griffith not be allowed to keep his passport card while traveling, claiming that this “poses a serious risk” that he may flee the country in a letter.

Griffith’s attorneys, Brian Klein and Sean Buckley, responded that they disagreed with the government’s characterizations and “were very surprised” by the letter.

If found guilty, Griffith faces up to 20 years in jail. The U.S. Attorney’s Office also wants Griffith to forfeit any property or money obtained for his appearance in North Korea.

Griffith had served as the head of special projects for the Ethereum Foundation but has been suspended since his arrest, according to a previous report.

Updated: 1-31-2020

Virgil Griffith Pleads Not Guilty To Evading U.S. Sanctions In North Korea Jaunt

Ethereum developer Virgil Griffith entered a plea of not guilty Thursday afternoon in a Southern District of New York courthouse. Griffith is charged with conspiring to violate the International Emergency Economic Powers Act after traveling to North Korea (DRPK) in April 2019 to attend a cryptocurrency conference.

If convicted, Griffth, who once called himself a “disruptive technologist” whose aim was to “make the Internet a better and more interesting place,” could face up to 20 years in prison. He traveled up from Alabama to attend the arraignment and appeared composed throughout, answering with a firm “Innocent” when Judge Castel asked how he would plea.

According to the government’s criminal complaint in United States of America v. Virgil Griffith, filed Nov. 21, 2019, the U.S. State Department denied Griffith permission to go to the DPRK to attend the conference because of U.S. sanctions against North Korea. But Griffith traveled to the DPRK anyway, via China, and “provided the DPRK with valuable information on blockchain and cryptocurrency technologies, and participated in discussions regarding using cryptocurrency technologies to evade sanctions and launder money,” charged the government.

During the arraignment in lower Manhattan, defense attorney Brian Klein asked if the government had interviewed other people who attended the April 2019 conference as part of its discovery process, adding, “We think [testimony from] other attendees will help exonerate our client.”

Klein responded “No comment” when asked by Cointelegraph about the latest developments.

Griffith, a U.S. citizen living in Singapore, was arrested on Nov. 28 as he landed at Los Angeles Airport. The government’s charges came “after the Trump administration raised concerns over the summer about the national security threat cryptocurrencies pose because of their potential to be used to finance illicit activities,” according to the New York Times. The government’s complaint referenced another individual who helped Griffith to enter the DPRK and may face charges as well, but the government’s attorneys declined to comment further on that point.

The crypto community is divided in its support of Griffith, Cointelegraph reported on Jan. 9 after Griffith was indicted and released on bail — he remains free, though somewhat exiled to Alabama. “I don’t think what Virgil did gave DRPK any kind of real help in doing anything bad. He *delivered a presentation based on publicly available info about open-source software,*” declared Ethereum founder Vitalik Buterin in early December.

North Korea may be in the early stages of building its own cryptocurrency, in what appears to be an effort to evade U.S.-imposed sanctions, Cointelegraph reported in September 2019. More recently, the United Nations warned that attending a North Korean cryptocurrency conference in February 2020 would most likely constitute a sanctions violation.

Judge Castel granted the government a continuance until March 17 to assemble more discovery evidence, the defense to review it and the parties to advise as to further motions.

Updated: 12-11-2020

Virgil Griffith Still Doesn’t Know What Exact Crimes He Is Accused of, Attorneys Say

Attorneys for Ethereum developer Virgil Griffith filed documents over the past week arguing he and they still don’t know exactly what he is being accused of doing.

Griffith, who was accused last year of violating U.S. sanctions law by traveling to North Korea and teaching locals how to transfer funds using cryptocurrency, has yet to receive a list of actual crimes for which he is being indicted, according to a Dec. 8 document published to the federal court system.

“The defense should not be forced to use a decoder ring on over 6,800 pages of discovery – much of which has been heavily redacted by the government – to discern the basic information that should be present in every indictment: what crimes were actually alleged to have been committed, by whom and where,” the document read.

Attorneys not involved in the case told CoinDesk in January that while prosecutors claim Griffith violated the International Emergency Economic Powers Act, at the time they hadn’t revealed what specifically he was accused of saying or doing.

According to one of Tuesday’s filings, this information is still unavailable. The document said Griffith is requesting “particulars” about what services he allegedly provided, who else was involved and how these services violated U.S. law.

Griffith’s attorney, Brian Klein, asked a federal judge to compel prosecutors to reveal details and evidence during a hearing in January. At the time prosecutors said they would comply with federal production requirements.

Legal Rights

Griffith’s team further argued Tuesday that first amendment rights protected the Ethereum Foundation coder against government action. Repeating their long-standing argument that Griffith received no payment for his North Korea speech and therefore rendered no “services,” they said Griffith was well within his constitutional rights.

“To argue that he did, the government has to twist basic words beyond their common meanings,” the filing said.

The U.S. State Department banned all U.S. citizens from traveling to North Korea without express permission in 2017.

The Argument Was Made In Support Of A Motion To Dismiss Filed Last Month

Moreover, the U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) had a much greater role in the investigation leading up to Griffith’s 2019 arrest than had been initially disclosed, a third filing said.

FBI agents were discussing the case with OFAC employees at least as early as October 2019, well before the previously disclosed timeline of November 2019, according to the filing.

“The exact nature of OFAC’s expressed concerns are identical to the issues at stake here: namely, whether Mr. Griffith’s presentation falls under the informational exemption under the Berman Amendment and the FTIA and whether the giving of an oral presentation constitutes a ‘service’ in the context of a conference,” the filing said.

Information in the public domain is generally exempt from IEEPA restrictions.

As such, the filing says, even if Griffith provided any information that falls under OFAC’s “services” bucket, it should still fall within that public domain exemption that is protected by the First Amendment.

Updated: 7-12-2021

Virgil Griffith Should Return To Jail Pending Trial, Prosecutors Tell Judge

Virgil Griffith, the Ethereum developer charged with violating U.S. sanctions law in North Korea, has violated his bail conditions and should be returned to jail, U.S. prosecutors wrote to the judge presiding over the case.

* Griffith has posed a serious flight risk since his arrest, the prosecutors wrote in their request, and his recent attempt to access one of his frozen cryptocurrency accounts containing $1 million has increased that risk to an “unacceptable level.”
* Griffith was arrested in November 2019 and charged with helping North Koreans circumvent U.S. economic sanctions via cryptocurrency.

* Prosecutors in the Southern District of New York (SDNY) allege Griffith violated the International Emergency Economic Powers Act by giving a speech in April at the Pyongyang Blockchain and Cryptocurrency Conference on how to use cryptocurrency to get around U.S. sanctions.

* Griffith’s lawyers has argued his First Amendment rights under the U.S. Constitution protected him and that he did not render North Korea any “services” because he received no compensation for the speech.

* The government’s lawyers seek a conference on their request at the earliest possible time.

* Jason Gottlieb, a partner and head of MorrisonCohen’s White Collar and Regulatory Enforcement practice group, took to Twitter to criticize the government’s request to have Griffith return to jail to await his trial, calling the prosecutors “incredibly heavy handed and punitive.”

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