What has happened?
A U.S. citizen has been charged in the Southern District of New York with conspiring to violate the International Emergency Economic Powers Act (IEEPA), allegedly providing services to North Korea by delivering a presentation and providing technical advice in North Korea on using cryptocurrency and blockchain technology to evade sanctions and launder money.
What does this mean?
According to the complaint, in April 2019, Virgil Griffith, a U.S. citizen and Singapore resident, travelled to North Korea to give a presentation at the “Pyongyang Blockchain and Cryptocurrency Conference”.
Griffith had asked for permission to go to North Korea, but his request was denied by the U.S. Department of State. According to the complaint, Griffith nevertheless travelled to North Korea by way of China.
At the conference, Griffith gave a presentation on topics pre-approved by North Korean officials, offering "valuable information" on blockchain and cryptocurrency, and participating in discussions on how cryptocurrency could be used to evade sanctions and launder money.
According to the allegations in the complaint, Griffith also identified several attendees who appeared to work for the North Korean government, and who asked him questions about blockchain and cryptocurrency and prompted discussions on technical issues, such as "proof of work" versus "proof of stake". These concepts relate to the creation of cryptocurrency through “mining.”
The complaint alleges that after the conference, Griffith started putting plans together to facilitate an exchange of cryptocurrency between North and South Korea. He is also said to have encouraged other U.S. citizens to travel to North Korea.
U.S. Attorney Geoffrey S. Berman stated:
“As alleged, 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.”
Under IEEPA and Executive Orders 13466 and 13722, U.S. citizens generally are prohibited from providing goods, services, or technology to North Korea without a licence from the U.S. Department of Treasury’s Office of Foreign Assets Control.
Griffith has been charged with conspiring to violate IEEPA, which carries a maximum term of 20 years in prison.
Please let us know if you have any questions on this development or if we can help you ensure that your organisation does not fall foul of international sanctions regimes.
Authored by Gregory Lisa and Beth Peters