China’s Link to Ethereum Dev Arrested for Advising North Korea on Avoiding Sanctions With Crypto
The American arrested and likely to be prosecuted for reportedly showing authorities in North Korea how to use cryptocurrencies to avoid U.S. sanctions and launder money traveled via China, sworn court papers have shown.
According to the US Department of Justice, a criminal complaint has been filed against Virgil Griffith, a US citizen, for “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.”
The consequences of North Korea obtaining funding, technology, and information to further its desire to build nuclear weapons put the world at risk, they add, and more serious “that a U.S. citizen allegedly chose to aid our adversary.”
On his website, Griffith describes himself as working for the Ethereum Foundation in special projects as well as research. He is accused of providing “highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions” despite “receiving warnings not to go.” He reportedly sought permission to visit North Korea but the Department of State denied his request hence had to go through China.
Manhattan U.S. Attorney announces arrest of US citizen Virgil Griffith for assisting North Korea in evading sanctions https://t.co/t9S5nhd2MH going to the DPRK crypto conference and giving a talk on, literally, how to evade sanctions
— David Gerard (@davidgerard) November 29, 2019
It is not immediately clear whether 36-year old Griffith’s complaint is linked to a nuclear advancement agenda but the reported trip to North Korea around April is the first real link that aligns with insinuations that have been peddled about China’s proposed digital currency.
In his recent interview on CNN’s First Move, former chief economist at the IMF, Kenneth Rogoff, suggested that China’s digital currency could be used to avoid sanctions. He also believes a US Federal Reserve coin (or Fedcoin) should be expected at some point – though nothing concrete has been made available – to counter China’s supposed ambition to challenge the US dollar dominance with its planned currency.
The Digital Currency Wars: A National Security Crisis Simulation organized by the Belfer Center’s Economic Diplomacy Initiative and held at the Harvard Kennedy School’s JFK Jr. Forum on Nov. 20 ended with a similar conclusion. It was acted that North Korea successfully launched a warhead-tipped missile into the Philippine Sea near Guam in defiance to financial sanctions having used China’s proposed digital currency to hide payments for arms, raw nuclear materials, rocket fuel, and other sanctioned products.
The overall submission from the simulation is that North Korea’s economic activity could be hidden from U.S. authorities since transactions with China’s digital currency would be operated on Chinese-owned infrastructure. The played out scene ended with options set for the U.S. President to contact China’s President about working together to prevent North Korea from advancing its nuclear agenda; modernize and harden the SWIFT system; and explore options for a U.S. digital currency.
The IEEPA which Griffith supposedly violated carries a maximum term of 20 years in prison but sentencing will be determined by the judge. The rationale behind his decision to attend the conference in North Korea is yet to be known but the furor it now generates corroborate the view that a digital currency could be useful to North Korea – as well as other nations under U.S. financial sanctions – to achieve independence from the global banking system.
In the deposition of an FBI special agent, Griffith maintains that his presentation at the conference contains basic concepts that are accessible on the internet and they have a “non-zero tech transfer”.