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American computer expert spoke in North Korea about cryptocurrency, and now he's under arrest

Joel Rubin, Los Angeles Times on

Published in News & Features

LOS ANGELES -- Can an American's comments about cryptocurrency violate his country's sanctions against North Korea?

That question is at the heart of a criminal case against Virgil Griffith, a rabble-rousing computer scientist who federal authorities say ran afoul of U.S. laws meant to isolate and punish the rogue state when he gave a talk this year at a technology conference in Pyongyang.

Griffith, 36, was taken into custody by FBI agents Thursday at Los Angeles International Airport and faces a charge of conspiring to violate the International Economic Powers Act, the legal backbone for sanctions against North Korea, according to a statement released by the U.S. attorney's office for the Southern District of New York, which is pursuing the case.

At a court appearance in Los Angeles on Monday, a magistrate judge ruled Griffith should go free while the case against him proceeds. Griffith was released on an $800,000 bond, which his parents and sister agreed to secure with their homes as collateral. His movements will also be monitored electronically. No date was set for his next court appearance.

"Mr. Griffith allegedly traveled to North Korea without permission from the federal government, and with knowledge what he was doing was against the law," FBI Assistant Director in Charge William F. Sweeney Jr. said in a prepared statement. "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 U.S. citizen allegedly chose to aid our adversary."

Brian Klein, a defense attorney representing Griffith who specializes in technology cases, said in a statement, "We dispute the untested allegations in the criminal complaint. Virgil looks forward to his day in court, when the full story can come out."

 

The unusual case stems from a trip Griffith made to the North Korean capital in April to attend a small conference with about 100 other people. Griffith had sought permission in advance from U.S. officials to make the trip and, after being denied, devised a plan with the help of an unidentified accomplice to cover his tracks by entering the country through China, according to a criminal complaint authorities unsealed last week. To further conceal his plans, Griffith opted not to have the travel visa that he received from North Korean diplomats in New York placed in his passport, the complaint alleges.

At the gathering, Griffith presented a talk on the quickly evolving world of cryptocurrencies, such as bitcoin and ethereum, and blockchain, the technology underpinning the controversial monetary systems. Blockchain essentially creates a digital ledger that is stored simultaneously on millions of computers. Proponents of the decentralized networks say they allow for greater transparency as no one person is in control and all transactions can be seen by anyone with access to the ledger.

Prosecutors claim that before he spoke, Griffith took direction from a conference organizer that he should tailor his comments to address how cryptocurrencies and blockchain could be used to launder money and circumvent the punishing U.S. sanctions that prohibit U.S. citizens from exporting "any goods, services, or technology to North Korea."

Griffith's talk, which he titled "Blockchain and Peace," included discussion of technical concepts and issues that need to be addressed when creating a new cryptocurrency and, after the conference, he began work on developing a new currency that would make it possible to send funds between North and South Korea, the complaint said.

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