US cryptocurrency expert arrested after appearance at North Korea conference

Virgil Griffith accused of helping country evade sanctions

Anthony Cuthbertson
Monday 02 December 2019 14:29 GMT
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The Pyongyang Blockchain and Cryptocurrency Conference took place at the PyongYang Science and Technology Complex
The Pyongyang Blockchain and Cryptocurrency Conference took place at the PyongYang Science and Technology Complex (DPRK)

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A leading cryptocurrency researcher has been arrested after travelling to North Korea for a secretive conference about blockchain technology.

US law enforcement charged Virgil Griffith under the International Emergency Powers Act for allegedly providing technical advice on how to evade international sanctions using cryptocurrency and blockchain technology.

The Department of Justice claimed Mr Griffith travelled to the reclusive state in April 2019 to speak at the Pyongyang Blockchain and Cryptocurrency Conference.

"Mr Griffith allegedly travelled to North Korea without permission from the federal government, and with knowledge what he was doing was against the law," said FBI assistant director-in-charge William Sweeney.

"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. It's even more egregious that a US citizen allegedly chose to aid our adversary."

North Korea has shown considerable interest in cryptocurrency in recent years, which offer a way to evade crippling economic sanctions.

Earlier this year, researchers at the Royal United Services Institute (RUSI) revealed how digital currencies offer a "financial lifeline" to the country as it seeks to develop weapons of mass destruction.

RUSI research analyst Kayla Izenman told The Independent at the time that the borderless and decentralised nature of cryptocurrencies made them an attractive target for actors attempting to circumvent the traditional financial system.

"At the very least, cryptocurrency exploitation is allowing North Korea to transact with the rest of the world in ways that aim to circumvent sanctions designed to curb its proliferation financing," she said.

A separate report by the UN Security Council from March estimated that North Korea has amassed more than £500m worth of bitcoin and other cryptocurrencies to support its regime.

April's conference was the first time the country had hosted such an event, though foreign media was banned from attending. Citizens of Israel, Japan and South Korea were also not welcome.

US Assistant Attorney General John Demers claimed that Mr Griffith provided "highly technical" information to North Korea, knowing that it could be used to launder money and evade sanctions.

"Despite receiving warnings not to go, Griffith allegedly travelled to one of the United States’ foremost adversaries, North Korea, where he taught his audience how to use blockchain technology to evade sanctions," Mr Demers said in a statement. "By this complaint, we begin the process of seeking justice for such conduct.”

Several high-profile figures within the cryptocurrency industry have expressed their support for Mr Griffith, including ethereum founder Vitalik Buterin, and cybersecurity pioneer John McAfee.

Virgil Griffith arrested for teaching North Korea how to avoid US sanctions by using cryptocurrency and the blockchain," Mr McAfee tweeted.

"See what our government has become - a government corrupt at the core, declaring publicly available information a national secret."

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