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Ethereum developer knew he was helping North Korea evade sanctions: US prosecutors

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Remember Virgil Griffith, the Ethereum developer arrested a year ago for sanctions violations after attending a conference in North Korea? U.S. government prosecutors have argued against his defense’s attempts to dismiss the case, saying he knowingly and willfully broke the law with his actions.

Griffith was released on a US$1 million bond in January 2020, and faces up to 20 years in prison if convicted.

It’s yet another demonstration that, while technology can provide a means to skirt human laws, it does not protect human participants from consequences once the law decides to get involved.

According to the prosecution, Griffith was well aware that his trip to Pyongyang in April 2019 would violate U.S. government sanctions—and that the knowledge he imparted in his lecture would assist others in North Korea in evading those sanctions. Quoting text messages he’d sent in the year before the event, it claimed Griffith knew that knowledge of cryptocurrencies would help people in the DPRK “get around sanctions” imposed as part of the International Emergency Economic Powers Act (IEEPA).

Not only that, but the content of his presentation at the conference was specifically tailored to highlight these benefits, the government said. It also mentioned one or more co-conspirators in the case who had assisted Griffith at various stages.

Griffith’s defense was attempting to have the case thrown out based on a number of reasons. It claimed the information he presented at the conference was general in nature and the contents were widely available to anyone with an Internet connection. Moreover, Griffith had not been paid to attend the conference so it couldn’t constitute a “service” under the IEEPA.

Defense lawyers also argued the four-page indictment against Griffith was “short and vague,” and violated his rights under the Fifth and Sixth amendments by not providing him with adequate information or notice regarding the government’s case against him.

Prosecutors called Griffith’s arguments “absurd,” saying that sanctions forbid all services of this type whether paid or unpaid. They claimed Griffith had acknowledged before the trip that blockchain technology and developers could assist in evading trade sanctions, and that Griffith had arranged to send a transaction from North to South Korea as a demonstration, even mentioning to his “co-conspirator” that this action itself would violate sanctions.

As for the information provided in its indictment, they countered that it was sufficient and prosecutors were under no obligation to supply all the evidence they held on Griffith and his accomplices.

Whether or not the information he presented was available elsewhere, packaging it as a lecture and following up with questions and answers clearly represented a value-added service and was of economic benefit to attendees. Additionally, Griffith went ahead with his trip to the DPRK despite being denied permission by the U.S. State Department beforehand.

That digital assets and blockchain technology could assist in helping foreign governments get around trade sanctions had long been spoken about in industry circles, but was rarely touted publicly as a key benefit. Griffith’s case in the US District Court for the Southern District of New York is the first to feature such a use case, though commentators have noted it’s more a national security matter that just happens to include cryptocurrencies.

Once again: code is not law

Why would Griffith have proceeded with his travel and presentation, despite alleged warnings and knowledge that it would break the law? It could be the hubris of developers who wrongly believe the ability to perform a successful process on a technological platform somehow means human authorities have no recourse. This is untrue, and dangerous to assume.

Code is law,” that oft-repeated favorite maxim of crypto-anarchists, applies only to computers. Human operators of those computers and beneficiaries of their processes are still very much subject to human laws, and governments have a wide array of methods to deal with them.

Access to services can be severely restricted, even if their use remains available to a few. Humans program and maintain the machines running the code, and the output of the code influences events in the human world. While these humans still live in the physical world, they can still be arrested, fined, imprisoned and influenced like anyone else.

Virgil Griffith‘s case is ongoing, and yet to be decided by a judge. Regardless of how information and technology may have assisted the North Korean government, this case will have a decidedly human outcome—something everyone in the technology industry should remember.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to BinanceBitcoin.comBlockstreamShapeShift and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

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