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

Regulation

Virgil Griffith, a former Ethereum (ETH) developer has been sentenced to 63 months in prison and will pay a fine of $100,000 for attending a conference and assisting North Korea use blockchain technology in contravention of economic sanctions imposed by the United States.

On Tuesday, April 12, U.S. District Judge Kevin Castel of the Southern District of New York handed down the decision. Judge Castel stated that “what you see here is intentionality, a deliberate, willful intent to violate the sanctions’ regime,” adding that the crime was made worse because Griffith had a “desire to educate people on how to evade sanctions.”

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

In early 2019 Griffith was unsuccessful in gaining permission from US authorities to travel to North Korea, but in April, he went anyway and visited the capital of Pyongyang for the “Blockchain and Cryptocurrency Conference”.

At the conference he gave presentations dressed in a North Korean suit about how the country could use cryptocurrencies to evade sanctions and launder money. He also presented methods on how smart contracts could be used to benefit the country in nuclear weapons negotiations with the U.S.

In an attempt to lower his sentence Griffith’s defense team provided evidence of factors which may have caused him to act irrationally. They presented a psychological assessment of Griffith which showed him suffering from both Obsessive Compulsive Personality Disorder (OCPD) and Narcissistic Personality Disorder (NPD).

His defense team said that diagnosis of OCPD and NPD explained the “obsession” Griffiths had for North Korea and is potentially what caused him to brush off warnings from his friends, family, and the government on unsanctioned travel to the country.

Related: The FBI’s takedown of Virgil Griffith for breaking sanctions, firsthand

At the hearing, Griffith was given the opportunity to speak stating he was remorseful of his actions, adding the sanctions on Russia due to the invasion of Ukraine had “shown their value” and that he had been “cured” of his “obsession with North Korea”.

The court did not appea convinced that Griffith was regretful, with Judge Castel saying:

“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 in November 2019 by the FBI, a few months after his return from the conference, he had several meetings with the Bureau regarding his trip prior to his arrest, even providing them with photographs of himself giving presentations at the conference.

North Korea has become increasingly sophisticated with its use of cryptocurrency both in evading sanctions and in using hacks and exploits to steal millions of dollars.

In January, a report by Chainalysis revealed that nearly $400 million was stolen by North Korean hackers in 2021 through exchange hacks and ransomware, employing a meticulous laundering system involving decentralized exchange swaps and multiple crypto tumblers.

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