Cryptocurrency expert accused of assisting North Korea in evading sanctions

Virgil Griffith "provided highly technical information to North Korea" that "could be used to help North Korea launder money and evade sanctions," officials said.

Nov. 29, 2019, 2:14 PM EST / Updated Nov. 29, 2019, 3:12 PM EST
By Daniella Silva and Tom Winter

A man was arrested in California and accused of traveling to North Korea to deliver a presentation on using cryptocurrency and blockchain technology that could help the country evade sanctions, federal prosecutors in New York said Friday.

Virgil Griffith, 36, was arrested Thursday at Los Angeles International Airport after he allegedly traveled North Korea in April and provided technological information that could assist in evading sanctions imposed on the country by the U.S., the U.S. attorney for the southern district of New York said in a statement. Griffith was set to appear in federal court in Los Angeles Friday.

Griffith is employed by Ethereum a block-chain operating system which has its own cryptocurrency platforms, public postings show.

“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,” U.S. Attorney Geoffrey Berman said in a statement. “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.”

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FOR IMMEDIATE RELEASE
Friday, November 29, 2019

Manhattan U.S. Attorney Announces Arrest Of United States Citizen For Assisting North Korea In Evading Sanctions

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, John C. Demers, the Assistant Attorney General for National Security, John Brown, Assistant Director of the Federal Bureau of Investigation (“FBI”) Counterintelligence Division, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the FBI, announced today the unsealing of a criminal complaint charging VIRGIL GRIFFITH, a United States citizen, 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. GRIFFITH was arrested at Los Angeles International Airport yesterday and will be presented in federal court in Los Angeles later today.

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.”

Assistant Attorney General John Demers said: “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. By this complaint, we begin the process of seeking justice for such conduct.”

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According to the Complaint unsealed today in Manhattan federal court:

Pursuant to the IEEPA and Executive Order 13466, United States Persons are prohibited from exporting any goods, services, or technology to the DPRK without a license from Department of the Treasury, Office of Foreign Assets Control (“OFAC”).

In or about April 2019, GRIFFITH traveled to the DPRK to attend and present at the “Pyongyang Blockchain and Cryptocurrency Conference” (the “DPRK Cryptocurrency Conference”). Despite that the U.S. Department of State had denied GRIFFITH permission to travel to the DPRK, GRIFFITH presented at the DPRK Cryptocurrency Conference, knowing that doing so violated sanctions against the DPRK. At no time did GRIFFITH obtain permission from OFAC to provide goods, services, or technology to the DPRK.

At the DPRK Cryptocurrency Conference, GRIFFITH and other attendees discussed how the DPRK could use blockchain and cryptocurrency technology to launder money and evade sanctions. GRIFFITH’s presentation at the DPRK Cryptocurrency Conference had been approved by DPRK officials and focused on, among other things, how blockchain technology, including a “smart contract,” could be used to benefit the DPRK. GRIFFITH identified several DPRK Cryptocurrency Conference attendees who appeared to work for the North Korean government, and who, during his presentation, asked GRIFFITH specific questions about blockchain and cryptocurrency and prompted discussions on technical aspects of those technologies.

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