Ethereum evangelist or money-laundering lecturer: Implications for Virgil Griffith
The U.S. Justice Department in the Southern District of New York has filed a criminal complaint against Virgil Griffith, a prominent employee of the Ethereum Foundation, after arresting Griffith at Los Angeles International Airport on 28 November 2019. The complaint alleges that Griffith violated the International Emergency Economic Powers Act, 50 USC § 1705 (IEEPA).
The criminal complaint states that Griffith admitted he attended the Pyongyang Blockchain and Cryptocurrency Conference in the Democratic People's Republic of Korea (DPRK) between April 26 and April 27 with approximately 100 other attendees, despite being refused permission to attend by the US State Department.
The complaint alleges at paragraph 15(i) that Griffith:
discussed how blockchain and cryptocurrency technology could be used by the DPRK to launder money and evade sanctions, and how the DPRK could use these technologies to achieve independence from the global banking system... [and] how blockchain technology, including a 'smart contract' could be used to benefit the DPRK
The complaint also states that an organiser of the conference instructed Griffith to emphasise:
the potential money laundering and sanction evasion applications of cryptocurrency and blockchain technology as such topics were most likely to resonate with the DPK audience.”
Represented by Brian Klein, Griffith has since been released from jail pending a trial. Brian Klein chairs the American Bar Association’s blockchain, digital currency, and ICO national institute, and has previously represented Charlie Shrem.
Founder of Ethereum Vitalik Buterin has expressed his support for his employee on twitter, extracted below (read from bottom to top, thanks Twitter):
However, in a formal statement the Ethereum Foundation said that:
The Foundation neither approved nor supported any such travel, which was a personal matter
While the matter has yet to receive a date for trial, the arrest has already proved to be divisive in the Ethereum, and broader blockchain community. With regulators and governments internationally expressing (often misdirected) concerns about the money-laundering risks enabled by blockchain technology, a relatively high profile member of the Ethereum Foundation giving instructional talks in the DPRK sends a bad message.