A US crypto researcher has been jailed after pleading guilty to conspiring to help North Korea evade economic sanctions.
Virgil Griffith, 39, a former developer for Ethereum, the world’s second largest crypto asset, was arrested in 2019 after giving a presentation on cryptocurrency and blockchain technology in Pyongyang.
He was sentenced to 63 months in prison and slapped with a $100,000 fine by US prosecutors late last night.
Griffith’s lawyer said in a statement that while the sentence was disappointing, the judge had “acknowledged Virgil’s commitment to moving forward with his life productively, and that he is a talented person who has a lot to contribute.”
According to the US Justice Department Griffith went to North Korea with the intention of demonstrating how blockchain and crypto could be used to evade US sanctions and fund the country’s nuclear weapons program. Griffith traveled to Pyongyang even though he had been denied permission from the US Department of State.
The judgement comes as worldwide regulators place increased focus on the use of crypto currencies to avoid sanctions amid Russia’s invasion of Ukraine.
“Our economic research suggests that crypto markets aren’t liquid enough to support the movement of the hundreds of billions controlled by sanctioned Russian organizations and oligarchs,” commented Kim Grauer, the head of research for crypto compliance firm Chainalysis.
“This leads us to believe that any Russian sanctions evasion using cryptocurrency will most likely resemble typical money laundering in which small amounts of cryptocurrency are moved to cashout services over time, rather than systematic, mass conversions between cryptocurrency and cash,” Grauer continued.
Despite assurances the UK’s financial watchdog and Bank of England jointly wrote to crypto asset firms last month urging service providers to ensure sanctions are imposed effectively.
The European Union unveiled a fresh tranche of sanctions targeting Russia last week which prevent crypto firms from providing high value services in the country.