ETH Developer Pleads Guilty to Helping North Korea Use Blockchain to Evade Sanctions

September 29, 2021, 11:00 AM AEST - 2 weeks ago

Virgil Griffith, a prominent Ethereum developer and one of the most recognised names in the crypto industry, has pleaded guilty to a federal charge accusing him of conspiring with the North Korean government to evade US sanctions law.

Two-Year Legal Battle Not Yet Over

Griffith’s September 27 appearance in the Southern District of New York courthouse ended a long battle with US authorities. Griffith had been arrested in November 2019 shortly after giving a keynote speech in the North Korean capital of Pyongyang. 

The reason for his arrest, according to prosecutors, was that the subject of Griffith’s presentation was how to launder money and evade sanctions using blockchain technology. While awaiting trial on house arrest, in July Griffith apparently violated the terms of his bail and was taken into custody.

Defence Lawyer’s Testimony Thwarted

According to Ethan Lou, a journalist who claims to know Griffith, he tried to seek legal advice on how best to prove his innocence. Griffith also tried to access his Coinbase account to pay his lawyers but access was denied numerous times. According to Lou, the court wanted a lawyer’s testimony to show Virgil tried to seek legal advice, but the lawyer was based in Singapore and was unable to travel.

Now that Griffith has pleaded guilty, US authorities have imposed a six-year prison penalty. The formal sentencing is expected to take place in January 2022. Needless to say, the case has raised a lot of eyebrows in the crypto community. “Unclear what new development caused this guilty plea,” tweeted Lou. “One possible reason is the barring of the remote testimony of an Ethereum Foundation lawyer.”

It is unknown what prompted the guilty plea. Griffith faced a charge of “conspiracy to violate” sanctions laws, meaning he was accused of trying to help North Korea but not actually helping the rogue state, giving the prosecution the green light to proceed without providing any tangible evidence.

Seven months ago, the US Department of Justice charged three North Korean hackers allegedly involved with cybercrimes that caused over US$1.3 billion in damages. These actors were said to have helped the North Korean government by stealing cryptocurrencies to fund its nuclear program.

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