Ethereum Developer Jailed 63 Months for Helping North Korea Evade Sanctions

A U.S. court has sentenced former Ethereum developer Virgil
Griffith to five years and three months in prison and pay a
$100,000 fine for conspiring with North Korea to help use
cryptocurrencies to circumvent sanctions imposed on the
country.

“There is no question North Korea poses a national security
threat to our nation, and the regime has shown time and again it
will stop at nothing to ignore our laws for its own benefit,” U.S.
Attorney Damian Williams said^[1]
in a statement.

The sentencing comes more than six months after Griffith
pleaded guilty^[2]
to violating the International Emergency Economic Powers Act
(IEEPA^[3]) by offering technical
advice to the hermit kingdom with regards to the use of digital
currency to bypass economic restrictions. Griffith was arrested in
November 2019.

North Korea is known to rely on^[4]
cryptocurrency heists^[5]
to get around international sanctions and use it to help fund
programs to build weapons of mass destruction. Indeed, the
nation-state-backed Lazarus Group siphoned^[6]
an estimated $400 million worth of digital assets from crypto
platforms in 2021 alone.

“The double scenario of espionage and money theft is unique to
North Korea, which operates intelligence units that steal both
information and money for their country,” Israeli cybersecurity
company ClearSky noted^[7]
in August 2020.

Griffith is said to have conceived plans back in 2018 to develop
and fund cryptocurrency infrastructure in North Korea, such as
crypto mining, and subsequently provided instructions on how the
regime could use blockchain technologies like smart contracts to
launder funds.

The 39-year-old defendant, a U.S. citizen and a resident of
Singapore, also formulated proposals to facilitate the exchange of
digital currency between North and South Korea, and attempted to
recruit other U.S. citizens to offer similar services to
individuals in the nation.

These actions were carried out despite having been refused
permission from the Department of the Treasury’s Office of Foreign
Assets Control (OFAC), the Justice Department said in the
ruling.

“Mr. Griffith admitted in court he took actions to evade
sanctions, which are in place to prevent the DPRK from building a
nuclear weapon,” Williams added. “Justice has been served with the
sentence handed down today.”