Crypto expert charged with helping North Korea evade US sanctions

Virgil Griffith has been arrested in Los Angeles and is alleged to have conspired to evade US-imposed sanctions.

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    The United States is alleging blockchain technology was used in assisting North Korea to get around sanctions imposed by US against the regime of dictator Kim Jong-un [File: James MacDonald/Bloomberg]
    The United States is alleging blockchain technology was used in assisting North Korea to get around sanctions imposed by US against the regime of dictator Kim Jong-un [File: James MacDonald/Bloomberg]

    The U.S. arrested an Ethereum Foundation cryptocurrency scientist and charged him with helping North Korea use blockchain technology "to evade sanctions and launder money."

    Virgil Griffith, 36, was arrested Thursday at Los Angeles International Airport and charged with conspiring to evade U.S. sanctions against the regime of dictator Kim Jong-un, according to a statement from Manhattan U.S. Attorney Geoffrey Berman. Griffith, a U.S. citizen who lives in Singapore, attended a blockchain and cryptocurrency conference in Pyongyang in April, despite specific State Department warnings. 

    "Griffith provided highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions," Berman said in a statement Friday. He "jeopardized the sanctions that both Congress and the president have enacted to place maximum pressure on North Korea's dangerous regime."

    Griffith was the subject of a 2008 New York Times Magazine profile that described him as a "cult hacker" and dubbed him the "Internet Man of Mystery." He worked with programmer and activist Aaron Swartz to develop Tor2web, which allows dark-web sites to be viewed on a standard internet browser. On his Linkedin profile, Griffith, a California Institute of Technology Ph.D., says he moved to Singapore in 2015 because he "concluded the best place for new growth" is Asia.

    He has tweeted about North Korea a number of times in the past year. On June 29, he opined that emerging multinational standards on cryptocurrency regulations would create "a market opportunity" for the isolated regime to launch an exchange. In August, he tweeted a picture of his visa to visit North Korea.

    Though the charges were filed in New York, Griffith is scheduled to first appear in federal court in Los Angeles sometime Friday.

    Ethereum didn't immediately return an email seeking comment on the charges against Griffith. His attorney, Galia Amram, didn't immediately respond to phone and email messages.

    The charges against Griffith don't name Ethereum. According to the complaint, he is employed by "an entity that functions as an open-source platform for the development of blockchain and cryptocurrency technologies," including "Cryptocurrency-1." Ethereum has a cryptocurrency it calls Ether.

    If convicted, Griffith faces as long as 20 years in prison.

    The case is U.S. v. Griffith, 19-mj-10987, U.S. District Court, Southern District of New York (Manhattan).

    SOURCE: Bloomberg