Close handcuffed man in jail

Ethereum developer Virgil Griffith sentence shows the technology is governed by law

When Uncle Sam imposes sanctions on a country, he means business. Former Ethereum developer Virgil Griffith learned that lesson the hard way when he received a 63-month prison sentence for teaching North Koreans how to use digital currencies to evade sanctions.

Griffith pleaded guilty and agreed to pay a $100,000 fine on top of his prison sentence.

Who is Virgil Griffith and what did he do?

In April 2019, former Ethereum developer Virgil Griffith traveled to North Korea. While there, he gave a talk at a digital currency conference in Pyongyang, in which he advised North Korean attendees on how to use digital currencies to evade international sanctions.

Griffith was arrested in November of 2019. In September 2021, he pleaded guilty to conspiracy to violate international sanctions against North Korea. The charge carries a maximum penalty of 20 years, but due to his guilty plea and other mitigating factors, Griffith’s attorneys negotiated it down to between five and six and a half years. He ultimately received 63 months or a little over five years.

Why did Giffith receive a relatively lenient sentence? A few factors contributed. First, his attorneys asked that the ten months he served in prison before being bailed count as time served. Second, the defense outlined the harsh conditions in Brooklyn’s Metropolitan Detention Center and how they had caused Griffith considerable discomfort. Third, they highlighted several psychological conditions Griffith suffers from, including Narcissistic Personality Disorder (NPD) and Obsessive-Compulsive Personality Disorder (OCPD), and his dedication to therapy since being diagnosed with them.

However, despite handing out the minimum recommended sentence, judge Kevin Castel did not buy the defenses’ narrative that Griffith was a good-natured man who meant well. The judge called his behavior narcissistic, read out text messages showing that Griffith’s illegal behavior was intentional, and called him out on his willingness to cooperate with the U.S. government when it suited his ends while working against it in North Korea.

“This guy is willing to play both sides of the street as long as he is the center of attention,” Judge Kevin Castel said.

Maximalists keep learning harsh lessons at the hands of the law

While Griffith was an Ethereum advocate, his story is reminiscent of several others in the short history of ‘cryptocurrencies,’ most notably that of Silk Road boss Ross Ulbricht. While the latter was a Bitcoin maximalist who was already behind bars before Ethereum was launched, he and Griffith both shared the mistaken belief that digital currencies could allow them to engage in criminal behavior without consequence. Both found out differently the hard way.

This blind idealism and disregard for the law is something that permeates the digital currency industry to this day. Despite harsh sentences such as Griffith’s and warnings from high-profile figures that legal compliance is not a choice, some naively claim that blockchain technology and digital currencies can bring down governments and work outside of the law. Not long ago, some were reporting that Russia could use BTC to evade sanctions, completely misunderstanding the nature of an immutable public ledger that presents in clear text.

Until the lesson finally sinks in that Satoshi Nakamoto never designed Bitcoin for any such purposes, and until the anti-law sentiment is chased out of the industry for good, these lessons will continue to be learned the hard way, and Bitcoin will be held back from reaching its true potential as a global peer-to-peer electronic cash system that operates within the law.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to BinanceBitcoin.comBlockstreamShapeShiftCoinbaseRipple,
EthereumFTX and Tether—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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