Via Economic Policy Journal

Virgil Griffith

The idea that bitcoin and other cryptocurrencies are somehow magical libertarian currencies that can escape government regulations proved otherwise on the shocking news that Virgil Griffith was arrested at Los Angeles International Airport on Thanksgiving day.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York has announced the unsealing of a criminal complaint charging Griffith, a United States citizen, with violating the International Emergency Economic Powers Act by traveling to North Korea in order to deliver a presentation and technical advice on using cryptocurrency and blockchain technology to evade sanctions.

Assistant Attorney General John Demers said:  “Despite receiving warnings not to go, Griffith allegedly traveled to one of the United States’ foremost adversaries, North Korea, where he taught his audience how to use blockchain technology to evade sanctions.  By this complaint, we begin the process of seeking justice for such conduct.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “There are deliberate reasons sanctions have been levied on North Korea.  The country and its leader pose a literal threat to our national security and that of our allies.  Mr. Griffith allegedly traveled to North Korea without permission from the federal government, and with knowledge what he was doing was against the law.  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.”

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The complaint also alleges that Griffith was interested in seeking citizenship in another jurisdiction.

The case is being handled by the Southern District’s Terrorism and International Narcotics Unit, with assistance from the Counterintelligence and Export Control Section.

It sounds to me as though Griffith is going to get the Ross Ulbricht treatment. The government is not going to go easy on him.

The charge of conspiring to violate the International Emergency Economic Powers Act carries a maximum 20-year prison sentence.

In 2014 Griffith received his Ph.D. from the California Institute of Technology in computation and neural systems under Christof Koch.

Griffith had said he aspires “to create minor public-relations disasters for companies and organizations I dislike.”

As I have stated many times, it is extremely dangerous to directly challenge the United States government, and cryptocurrencies are not some magical tool in any way that will allow you to evade the wrath of the government.

This includes attempting to challenge the regulations of cryptocurrency exchanges and operators that work within the guidelines of US government rules.

I am aware of a cryptocurrency trader who recently opened multiple accounts with a major cryptocurrency exchange in an attempt to evade single account trading limitations. The terms of service state that multiple accounts are not allowed and cryptocurrency in multiple accounts will be seized.

The exchange detected this person’s multiple accounts and seized some $300,000 of cryptocurrency in his accounts.

RW