The FBI arrested the Ethereum Foundation’s special projects director today at Los Angeles International Airport, alleging that he assisted the North Korean regime in devising a workaround for US sanctions using the Ethereum blockchain.
Investigators say that during a trip to North Korea earlier this year, Virgil Griffith “provided highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions.”
“In allegedly doing so, Griffith jeopardized the sanctions that both Congress and the president have enacted to place maximum pressure on North Korea’s dangerous regime,” U.S. Attorney Geoffrey S. Berman said in a statement.
Griffith allegedly defied the US government and attended the Pyongyang Cryptocurrency and Blockchain Conference in February. There, North Korean officials discussed the prospect of a sovereign digital currency, as well as a way to use Ethereum “smart contracts” to develop an extra-judicial court system.
“We cannot allow anyone to evade sanctions, because the consequences of North Korea obtaining funding, technology, and information to further its desire to build nuclear weapons put the world at risk,” said FBI Assistant Director-in-Charge William F. Sweeney Jr.
Wills Bentley de Vogeleare, a friend of Griffith's, said that he believed the feds were overreacting. Griffith, he said, "wasn’t there to teach them about how to get around sanctions but teach them about Ethereum, just like he’s done at many similar conferences around the world."
Griffith will be arraigned in federal court court later today. If convicted, the crime carries a maximum sentence of 20 years.