Crypto Expert Gets 63 Months for Helping North Korea Evade U.S. Sanctions

(Bloomberg) -- A cryptocurrency expert was sentenced to more than five years in prison after pleading guilty to helping North Korea evade U.S. sanctions.

Virgil Griffith, a former Ethereum Foundation cryptocurrency scientist, told a federal judge in New York on Tuesday that he “arrogantly and erroneously” thought he knew better than U.S. authorities, people at his company and his family, all of whom tried to dissuade him from participating in a 2019 blockchain and cryptocurrency conference in the North Korean capital, Pyongyang. 

U.S. District Judge P. Kevin Castel imposed a 63-month sentence for Griffith, who pleaded guilty in September to one count of conspiracy to violate the International Emergency Economic Powers Act. The defendant had asked for just two years behind bars, but the judge rejected that request, saying in a hearing in Manhattan that Griffith showed “a deliberate, willful intent to violate the sanctions regime.”

Griffith, 39, ignored specific State Department warnings against attending the conference. He was arrested in November 2019 in Los Angeles on charges of providing technical blockchain information to the regime of dictator Kim Jong Un that prosecutors said could be used to help the country launder money and evade sanctions. 

In explaining the sentence, Castel referred to photographs of Griffith and an unidentified co-conspirator at the conference explaining how to convert North Korean money into cryptocurrency as a way to evade sanctions. In the photos, Griffith is dressed in a North Korean-style uniform, standing in front of a white board on which he drew a smiley face and wrote “No sanctions yay.”

While Griffith faced as much as 20 years in prison, prosecutors agreed to seek no more than 6 1/2 years in a plea deal. Griffith has been in federal custody since July, when Castel revoked his bail, saying a surge in the value of his cryptocurrency holdings gave him the means and incentive to flee.

Lawyers for Griffith told the judge he suffers from obsessive compulsive personality disorder and narcissistic personality disorder. He was obsessed with North Korea and hoped, “arrogantly and naively,” that he was acting in the interest of peace.

“I love my country and did not set out to do anything to harm it,” Griffith said in a letter to the judge before sentencing.

A U.S. prosecutor argued Griffith’s actions were well planned and that they “struck at the heart” of the North Korea sanctions program.

“We are all bearing witness to a war generated by the whim of a dictator,” Assistant U.S. Attorney Kimberly Ravener told the judge, referring to Russia’s war in Ukraine. “Our central tool has been sanctions.”

Griffith was the subject of a 2008 New York Times Magazine profile that described him as a “cult hacker” and dubbed him the “Internet Man of Mystery.“ 

The case is U.S. v. Griffith, 20-cr-00015, U.S. District Court, Southern District of New York (Manhattan).

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