- The International Emergency Economic Powers Act (IEEPA) prohibits the release of goods, services, or technology without prior permission from the federal government.
- If convicted, Virgil Griffith could potentially face 20 years behind bars.
Cryptocurrency was created as a decentralized method of payment that could be used around the world. It isn’t ruled by any single entity, but there are many countries that have made the assets illegal to use. In the United States, the legal digital currency is used for trading, investing, and even purchases with some merchants. However, one of the uses that it should never be applied to is to evade sanctions, which is exactly what Ethereum Foundation member and ETH Developer Virgil Griffith did, and he’s just been caught.
According to a press release on November 29th from the United States Department of Justice, Griffith is a US citizen, and he recently traveled to North Korea, delivering a presentation regarding cryptocurrency. Ordinarily, this type of presentation would not break any laws, but Griffith was applying this knowledge to teach the North Korean public to use the fintech to evade sanctions. This action violates the International Emergency Economic Powers Act (IEEPA), leading to Griffith’s arrest at the Los Angeles International Airport on Thanksgiving Day by the FBI and the Department of Justice. Now, Griffith is scheduled to face federal court, where he stands to receive a maximum sentence of 20 years, if convicted.
“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,” said U.S. Attorney Geoffrey S. Berman. He added,
“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.”
John Demers, the Assistant Attorney General, also commented in the press release, stating that Griffith had received warnings not to go to North Korea before he took his trip. However, upon entering the country, Demers states that Griffith “taught his audience how to use blockchain technology to evade sanctions.”
William F. Sweeney Jr., the Assistant Director-in-Charge of the FBI, added that the sanctions against North Korea were established are due to “deliberate reasons,” as the country and its leadership are “a literal threat to our national security and that of our allies.” He spoke about the allegations against Griffith, stating that the citizen had not received permission to make his trek to North Korea, as his information could essentially “put the world at risk.” Sweeney called Griffith’s actions “egregious.”
The complaint in the Manhattan states that Griffith’s travel arrangements were to both attend and present at an event called the Pyongyang Blockchain and Cryptocurrency Conference. Griffith was told not to travel to the event, but he attended and presented anyway, where he discussed the use of this technology for the purpose of laundering money and evading sanctions. After the conference took place, the complaint states that Griffith had been working on plans to allow for crypto exchanges to take place between North Korea and South Korea, while also announcing plans to give up his citizenship in the United States. Griffith, age 36, lives in Singapore and is a citizen of the United States still, which has led the authorities to charge him with violation of the IEEPA.
However, not everyone believes that Griffith should be charged. According to Decrypt, a friend of Griffith’s named Wills Bentley de Vogeleare stated that the federal agents are overreacting in the arrest. He adds that Griffith’s presence wasn’t meant to show North Korean citizens how to evade sanctions, “but teach them about Ethereum, just like he’s done at many similar conferences around the world.”
Anyone who travels abroad teaching about cryptocurrency is now a target.
Please word your talks and select your locations carefully. https://t.co/0faiUuCzvi
— 💯 (@StopAndDecrypt) November 29, 2019
The IEEPA and Executive Order 13466 state that no citizen of the United States is permitted to export technology, services, or goods without getting a prior license from the Department of the Treasury, Office of Foreign Assets Control (“OFAC”). This matter is being handled by the Terrorism and International Narcotics Unit of the department, of which U.S. Attorneys Kimberly Ravener, Michael K. Krouse, and Kyle A. Wirshba are primarily handling the case.
As with any crime in the United States, the press release reminds the publish that the charge “is merely an accusation,” and Griffith is still innocent until proven guilty. The full press release from the Department of Justice can be viewed at here.