Defocused waving flag of the United States behind barbed wire fence.

Ethereum’s Virgil Griffith sentenced to over 5 years in US prison over sanctions violations, more indictments expected

A federal court in New York has sentenced former Ethereum Foundation researcher Virgil Griffith to 63 months in prison for travelling to North Korea to give a presentation on how to use digital assets to circumvent sanctions.

Griffith had pleaded guilty in September 2021 to charges of conspiracy to violate the International Emergency Economic Powers Act, the foundational statute which powers the U.S. sanctions regime.

The charges arose from Griffith’s decision to attend a conference in Pyongyang in early 2019, while he was still an employee of the Ethereum Foundation. There, he gave a presentation on blockchain technology. The trip is an obvious violation of U.S. sanctions against the hermit kingdom of North Korea, and the U.S. State Department had denied an earlier request by Griffith for permission to visit North Korea.

In delivering the sentence, Judge Castel rejected the suggestion that Griffith’s actions were “misguided.”

“The fact of the matter is Virgil Griffith…hoped to come home to Singapore or elsewhere as a crypto hero. To be admired and praised for standing up to government sanctions, for his fearlessness and nobility.”

It’s an all-too-commonly-expressed objective among certain corners of the digital asset sphere, where blockchain technology’s capacity to allow users to flout the law is seen as a worthy end in and of itself. That law enforcement acted so swiftly in arresting Griffith (and that the ultimate outcome for Griffith was so decisive) should be a welcome rebuff against such attitudes.

Indeed, and perhaps most importantly, prosecutors made clear that further indictments are set to be brought against Griffith’s co-conspirators. According to Griffith’s indictment, the accused conspired with “others known and unknown” to violate U.S. sanctions. These co-conspirators helped Griffith travel to North Korea and impressed upon Griffith the need to show those he met in North Korea that blockchain could be used to launder money and avoid sanctions.

It is not known whether the co-conspirators are other Ethereum Foundation employees.

While Griffith awaited his day in court, Ethereum founder Vitalik Buterin defended his colleague on Twitter, sharing a petition to ‘free’ Virgil Griffith and assuring his followers that “I don’t think what Virgil did gave DPRK any kind of real help in doing anything bad.”

Despite Buterin’s defense and despite whatever contrition Griffith is now expressing, both ring hollow considering the level of premeditation evident from the prosecution’s case.

Griffith was formulating his plans as early as 2018, when he was employed by the Ethereum Foundation, to provide services to people within North Korea to help them develop their digital asset capabilities. According to text messages revealed by the prosecution, he told a friend that “we’d love to make an Ethereum trip to the DPRK and set up an Ethereum node … It’ll help them circumvent the current sanctions on them.”

Text messages also revealed in the complaint show Griffith telling an unnamed associate that he needed to send ‘crypto’ between North Korea and South Korea; when the associate asked if that was a sanctions violation, Griffith said “it is.”

Additionally, Griffith was sent to jail for violating the terms of his US$1 million bail months after his arrest. The former Ethereum developer had attempted to access the ETH held in his Coinbase account, a clear violation of those bail conditions. Judge Castel, in hearing the violation, called attempts by Griffith’s defence team to explain the attempt was a “story” that was “likely not true.”

Griffith was also caught bragging about the incident to hotel staff following his initial arrest.

Judge Castel said that these factors make it unclear whether Griffith’s expressed regret is genuine.

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