On January 7, the US District Court for the Southern District of New York filed an indictment against Virgil Griffith, an Ethereum Foundation researcher. According to that court filing on Tuesday, a federal grand jury charged Griffith with conspiracy to knowingly violate the International Emergency Economic Powers Act.
This Act is a US Federal law that authorizes the president to regulate international commerce. It was introduced in 1977. The president can use it in case of a national emergency originating from outside the country. Reports reveal that Griffith is accused of knowingly and willfully having conspired to violate some of the measures that were taken against the Democratic People’s Republic of Korea (DPRK).
Griffith got arrested in late November for supposedly delivering a presentation on how to use blockchain and cryptos to circumvent sanctions. He is thought to have done so with other people. At least one of these people according to the court will be brought to and arrested in the Southern District of New York. The document states:
“It was a part and an object of the conspiracy that Virgil Griffith, the defendant, and others known and unknown, would and did provide and cause others to provide services to the DPRK, without first obtaining the required approval.”
The court also wants all properties that Griffith acquired or earned as a result of his activities in the DPRK to be forfeited. The current charges facing the researcher carry a maximum of 20 years in prison.
Crypto Community Divided
Ethereum founder, Vitalik Buterin, said in December that by going to deliver these speeches in North Korea, Griffith showed an important virtue of geopolitical open-mindedness, adding:
“I don’t think what Virgil did give DPRK any kind of real help in doing anything bad. He delivered a presentation based on publicly available info about open-source software. There was no weird hackery ‘advanced tutoring.’ […] Virgil made no personal gain from the trip. […] I hope USA […] focuses on genuine and harmful corruption that it and all countries struggle with rather than going after programmers delivering speeches.”
On the other hand, Laura Shin, a crypto-journalist, said in a Twitter thread that North Korean citizens are not at any given time authorized to talk to foreigners. She added that Griffith must have therefore interacted with the regime and not the common people:
“I see people saying a talk in NK could help the people against the government. But an approved public talk means you are interacting with the dictatorship, giving them the knowledge that helps them. And what do they do? They oppress 25 million people and they’ve done so for decades. […] If you want to help everyday North Koreans, it has to be in secret.”
Shin is also convinced that the local population does not have any access to the internet. They even do not have a clear idea of what the internet is all about. She alluded to the fact that DPRK citizens would have no way to access any public blockchain. Thus, the knowledge that Griffith shared would not prove useful to them:
“Let’s say Virgil could have educated everyday North Koreans on crypto. He would likely have to start such a presentation by explaining what the internet is. […] Owning the kind of device you would need to access it is prohibited and likely something that could get you sent you to a very scary place.”
Some commentators and analysts allege that the borderless nature of cryptos makes them the perfect tools for evading sanctions. People can move funds without having to seek approval of financial regulators.
According to reports published in September 2019, North Korea appears to be in the early stages of setting up its crypto. The North Korean crypto project seems to be an effort to avoid any US-imposed sanctions.
Last month, Iran’s president proposed the idea of creating a Muslim crypto. The crypto would become one of the main means of confronting the economic dominance of the United States in the region.
Notably, Venezuela is also trying to circumvent US sanctions using their local crypto-asset called Petro. The stablecoin that was launched in February 2019 is allegedly tethered to Venezuelan crude oil supplies.