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U.S. Hacker Sentenced to Five Years Following Crypto Lessons in North Korea

Stock image of the North Korean flag, along with cryptocurrency
(Image credit: Shutterstock)

According to a report on NBC News, cryptocurrency expert and hacker Virgil Griffith was sentenced to five years in prison this Tuesday for aiding North Korea in avoiding U.S. sanctions. The sentence comes in wake of his participation in a cryptocurrency-focused conference held in North Korea's capital city, Pyongyang in April 2019, which the U.S. citizen attended even after being denied a travel permit for the purpose. Griffith pled guilty to conspiracy last year, which accelerated his sentencing.

According to the prosecutors' documentation, Griffith aided in the development of cryptocurrency-focused infrastructure and equipment inside North Korea. These accusations build upon the transmission of sensitive and highly technical information that would allow for the circumvention of U.S. sanctions deployed throughout classic (non-crypto) financial systems. The information was disclosed to a panel of around 100 participants in the 2019 cryptocurrency conference, which included North Korean government officials.

Prosecutors said Griffith acknowledged his presentation could configure a transfer of technical knowledge to the conference's attendees, which are prohibited under the U.S. sanctions directed at the country and its residents. Participation in the conference was thus likened to a technology export, which prompted the prosecutors' pursuit of the case.

According to them, the knowledge was passed on with the full knowledge that its direct recipients posed a nuclear and historic threat against the United States, putting national security at stake. It didn't help Griffith's case that he actively circumvented the absence of a travel permit by entering North Korea via China. Besides the five-year sentence, Griffith has also been fined $100,000.

Brian Klein, Griffith's attorney, described the turn of events as an unfortunate error on the hackers' part, who "developed a curiosity bordering on obsession" as it pertains to North Korea. He further claimed Griffith's actions were carried out in the interest of an "arrogant and naïve" belief that he was carrying them out in the interest of peace.

Cryptocurrencies and blockchain tech in general have garnered increased attention as vehicles for skirting economic sanctions following the Russian invasion of Ukraine and the series of sanctions levied at the Russian state, its territories and citizens. Before Ukraine's invasion, Russia was considering a ban on cryptocurrencies, a position that looks like it's being reversed in wake of the paralyzing sanctions and private company pull-outs from the market, adding credence to cryptocurrency's potential implications for worldwide geopolitics.

Francisco Pires
Francisco Pires

Francisco Pires is a freelance news writer for Tom's Hardware with a soft side for quantum computing.

  • Soaptrail
    I understand federal laws have higher prison sentences than states and cities but if this was a corporation instead of a person no jail time and a minor fine would have been the worst outcome.

    I am not saying this person should not be punished but lets be realistic.
    Reply
  • Krotow
    The reason behind punishment here is to deter other hippies from doing unacceptable things. Although I admit that proper public education through all country without mayhem which is happening in US educational system now, would work better in future.
    Reply
  • jacob249358
    thats a lot of money for just helping out some homies. Kinda surprised North Korea couldn't just have a Korean do it.
    Reply
  • jkflipflop98
    So this guy travelled to another country entirely and gave a speech on Cryptocurrencies. . . .


    Now he has to to five years in prison in the USA and pay $100,000?

    Seems quite heavy-handed considering cryptocurrencies aren't a threat to anyone, and they REALLY had to stretch to classify this as a "technology export".
    Reply
  • Krotow
    jkflipflop98 said:
    Seems quite heavy-handed considering cryptocurrencies aren't a threat to anyone, and they REALLY had to stretch to classify this as a "technology export".

    Odds are that Griffith did more than educated fellow commies about cryptocurrencies. From publicly known information seems he was an nail in arse for companies and government already from 2000-ies. Visit in North Korea was last straw.
    Reply
  • cryoburner
    jkflipflop98 said:
    So this guy travelled to another country entirely and gave a speech on Cryptocurrencies. . . .

    Now he has to to five years in prison in the USA and pay $100,000?

    Seems quite heavy-handed considering cryptocurrencies aren't a threat to anyone, and they REALLY had to stretch to classify this as a "technology export".
    If a North Korean citizen did something similar, North Korea would likely have them executed upon their return. Of course, they probably wouldn't even have gotten the chance to travel outside the country anyway, and would have likely been executed trying to cross the border to get out. Just being a non-government-sanctioned "hacker" in the country might result in a similar outcome, or at least many years of heavy labor, assuming a regular citizen even managed to gain access to the resources needed to become a hacker there in the first place.

    Also, the North Korean government has long been known to print large quantities of counterfeit US currency, along with illicit drug exports and the like, so the goal of any cryptocurrency presentation targeted at government officials is undoubtedly going to be centered around similar large-scale money laundering schemes. This isn't just some guy attending a public convention or something.
    Reply
  • digitalgriffin
    As I always said "Government loathes what it can't control". This will only speed up the adoption of a federal crypto currency which will make other crypto currencies illegal to own within 10 years.

    A federal crypto will be subject to:
    De anonymization. All transactions will be traceable.
    Taxation
    Be 1:1 fungible with US greenbacks. (Negating tether)It will negate any benefit the proponents of crypto like to porpet: privacy with anonymous wallets, lack of govt control, tax free, investable. And I'm okay with that.
    Reply
  • jacob249358
    digitalgriffin said:
    As I always said "Government loathes what it can't control". This will only speed up the adoption of a federal crypto currency which will make other crypto currencies illegal to own within 10 years.

    A federal crypto will be subject to:
    De anonymization. All transactions will be traceable.
    Taxation
    Be 1:1 fungible with US greenbacks. (Negating tether)It will negate any benefit the proponents of crypto like to porpet: privacy with anonymous wallets, lack of govt control, tax free, investable. And I'm okay with that.
    Why would you be ok with that? That's total government control and things would spiral into dictatorship real quick. Dont follow their agenda? they will freeze all your accounts so you cant buy anything. We could even end up with a social credit system and if you have a bad score you get extra taxes or frozen accounts. Scary stuff imo
    Reply
  • Co BIY
    He's lucky he made it back from NK to face prosecution.

    The association of Crypto tech and North Korea doesn't really support it's claims as a pure tool for freedom.

    More likely it's "dual-use" and the moral content will be determined by the user.
    Reply
  • digitalgriffin
    jacob249358 said:
    Why would you be ok with that? That's total government control and things would spiral into dictatorship real quick. Dont follow their agenda? they will freeze all your accounts so you cant buy anything. We could even end up with a social credit system and if you have a bad score you get extra taxes or frozen accounts. Scary stuff imo

    The US Government can do that now with any bank account. It's not something I particularly agree with, but it will stop crooks from profiting as every transaction is monitored. And technically speaking, you could still keep your American Crypto in an exchange, like Switzerland, or some other country. The hosting country would just be required to track it and report it back to the USA. (Like they do now) USA can't touch funds in other countries. Can they stick you in jail for tax evasion? Sure. Touch those funds? Nope.

    When you start hacking and threatening infrastructure for anonymous money, then it becomes a national security issue. Also, when some exchange gets hacked, and there is no way to trace it, then yes it's a problem. When most crypto works on POW and it's less environmentally friendly than cash, then yes, it's a problem. When multi millionaires or rogue nations hide assets to avoid taxes/sanctions, then yes it is a problem.

    If you don't like the way government is run, you vote them out of power.
    Reply