Cryptocurrency expert Virgil Griffith reportedly once said it would be 'really cool' if North Korea mined Ether
- Virgil Griffith, the US cryptocurrency expert arrested last week on suspicion of helping North Korea evade US sanctions, reportedly said it'd be "really cool" if North Korea mined ether.
- Ether is a cryptocurrency developed by the Ethereum Foundation, a nonprofit cryptocurrency platform which Griffith also works for.
- Griffith reportedly also told fellow crypto experts in April that he intended to arrange the delivery of equipment into North Korea to create ether.
- Griffith has since been released from prison and is awaiting trial. His lawyer described the allegations against him as "untested."
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A US cryptocurrency expert arrested last week on suspicion of helping North Korea evade US sanction told acquaintances last year that he thought it would be "really cool" if the reclusive state mined cryptocurrency ether, according to one person with direct knowledge of the matter.
Virgil Griffith, 36, a US citizen who works for the Ethereum Foundation, told fellow digital currency experts in April 2018 about his intention to arrange the delivery into North Korea of equipment to create ether, two sources told Reuters at the time.
Cryptocurrencies, like bitcoin and ether, are created through a computer process called mining, which requires powerful hardware. Once generated, they can be exchanged on anonymous online platforms for fiat currencies such as the US dollar, which in turn can help illicit activities like evading sanctions or laundering money.
One of the sources said Griffith said it would be "really cool" if ether were mined in North Korea.
Reuters was unable to determine whether Griffith's plans to send the equipment to North Korea, which have not been previously reported, came to fruition. Federal prosecutors in Manhattan charged Griffith over a different incident, accusing him of sharing valuable technical information during a conference in North Korea in April 2019.
"We dispute the untested allegations in the criminal complaint," said Brian Klein, Griffith's attorney, in a written statement. "Virgil looks forward to his day in court, when the full story can come out."
Klein added that he was pleased that a judge found that his client should be released from jail pending trial.
The US Department of State had denied Griffith permission to attend the April conference in Pyongyang
A spokesman for the Ethereum Foundation declined to comment on the mining plans. US prosecutors did not respond to a request for comment.
According to the federal complaint, Griffith traveled to North Korea via China this April to attend the Pyongyang Blockchain and Cryptocurrency Conference, despite being denied permission by the US Department of State to go.
There, he and other attendees discussed how cryptocurrency technology could be used by Pyongyang to launder money and evade sanctions, the prosecutors said.
Griffith, who faces up to 20 years in prison, acknowledged in a consensual interview with the FBI in November that his presentation amounted to a transfer of technical knowledge to other attendees, the complaint said.
The Ethereum Foundation said in a written statement that it is aware of the recent charges filed against Griffith, and that it was not represented in any capacity at the events outlined in the Justice Department's filing. The "Foundation neither approved nor supported any such travel, which was a personal matter," it added.
The complaint says Griffith and others combined and conspired to violate rules in the International Emergency Economic Powers Act from as early as August 2018. But the two sources said Griffith was talking about his interest in helping North Korea create ether at least since April that year, when cryptocurrency and blockchain experts gathered for an industry conference in Seoul's Walkerhill Hotel.
An East Asian cybersecurity expert has said Griffith's presence in Pyongyang is 'likely to have been valuable to North Koreans'
Griffith, who lives in Singapore, said that he planned to get the equipment through China into North Korea with the help of a Singaporean friend who was going to be in Pyongyang to participate in the annual marathon, the people said.
Griffith, who has a doctorate from the California Institute of Technology, said at the time the plan was to have someone hand deliver the equipment to North Korea's telecom agency, one of the sources said.
The 36-year-old's actions were defended by Ethereum cofounder Vitalik Buterin last week. On Sunday, he tweeted his hope that the US would "show strength rather than weakness and focuses on genuine and harmful corruption," and said he didn't think Griffith gave North Korea "any kind of real help in doing anything bad."
"Most North Koreans, even relatively high-ranking government officials, do not have regular and unimpeded access to the global internet and it is therefore more difficult for them to gain access to knowledge about cryptocurrency that others might find basic or common," she added.
North Korea is known to steal from cryptocurrency exchanges as well as banks. As Reuters reported in August, North Korean hackers stole $2 billion from banks and cryptocurrencies at leader Kim Jong-un's behest in order to fund the development of nuclear weapons.