For attending a conference and enabling North Korea to use blockchain technology in violation of US economic sanctions, Virgil Griffith, a former Ethereum engineer, has been sentenced to 63 months in jail and will pay a fine of $100,000.
The decision was handed down on Tuesday by United States District Judge Kevin Castel of the Southern District of New York. “What you see here is intentionality, a conscious, willing intent to breach the sanctions regime,” Judge Castel said, adding that Griffith’s “desire to educate individuals on how to dodge sanctions” made the crime much worse.
Griffith pleaded guilty in September 2021 to conspiring to violate the International Emergency Economic Powers Act, which prohibits Americans from exporting “goods, services, or technology to the DPRK (North Korea) without a licence from the Department of the Treasury, Office of Foreign Assets Control (OFAC).”
Griffith attempted to fly to North Korea in early 2019, but was denied permission by US authorities. He flew to Pyongyang, North Korea’s capital, for the Blockchain and Cryptocurrency Conference in April, despite this.
He presented presentations while dressed in a North Korean suit about how the country could utilise cryptocurrencies to circumvent sanctions and launder money at the conference. He also discussed how smart contracts could help the country in nuclear-weapons talks with the US.
Griffith’s defence team presented evidence of causes that may have led to his illogical behaviour in an attempt to reduce his sentence. Griffith was diagnosed with obsessive-compulsive personality disorder (OCPD) and narcissistic personality disorder, according to the results of a psychological evaluation (NPD).
OCPD and NPD explained Griffiths’ “obsession” with North Korea
Griffiths’ defence 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 unofficial travel to the country.
Griffith was allowed to speak at the hearing, expressing regret for his acts and declaring that the sanctions imposed on Russia as a result of the invasion of Ukraine had “proven their value” and that he had been “cured” of his “obsession with North Korea.”
Judge Castel stated that the court was not convinced that Griffith was sorry:
“Virgil Griffith planned to return home as a crypto hero, to be loved and praised for defying government sanctions, for his bravery and nobility.”
The FBI detained Griffith a few months after he returned from the conference in November 2019. Prior to his arrest, he spoke with the Bureau numerous times about his trip, including showing them photos of himself giving talks at the conference.
North Korea’s usage of cryptocurrencies has advanced to the point where it can now evade sanctions while also stealing millions of dollars through hacks and exploits.
According to research released in January by Chainalysis, North Korean hackers stole approximately $400 million in 2021 through exchange hacks and ransomware, using a thorough laundering strategy that included decentralised exchange swaps and several crypto tumblers.