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When Ethereum developer Virgil Griffith landed in LAX on Thanksgiving day, he was escorted straight into FBI custody and into court within 24 hours.
His crime? Griffith was charged with providing technical information to an enemy government to help them circumvent US sanctions.
How did he do this? By giving a talk on the basics of crypto at a blockchain conference.
If you’re sensing a bit of a disconnect here between Griffith’s actions and his crime, you’re not alone.
How is it that sharing information that is publicly available anywhere on the internet could be labeled as treason and merit as much as 20 years in prison?
Read on to learn about the case against Griffith and what this means for all participants in the crypto space.
An overview of the charges against Griffith
As mentioned above, Griffith’s crime was essentially speaking at a blockchain conference.
The trouble is, this conference just so happened to be the Pyongyang Blockchain and Cryptocurrency Conference.
Given the US government’s sanctions against North Korea, U.S. passports cannot be used to travel to North Korea. That is, unless they are specially validated by the Department of State.
So, prior to the event, Griffith requested permission to travel to North Korea but was denied.
Nonetheless, he acquired a visa to the DPRK through a diplomatic mission facility in New York. They issued this on a separate paper from his passport. And as a Singaporean resident, he made his way to North Korea by way of China.
Once there, the DoJ’s official press release reports that Griffith spoke about the following in his talk:
“He discussed, among other things, how a blockchain technology, including a “smart contract” could be used to benefit the DPRK… [and engaged in] discussions on technical issues such as “proof of work” versus “proof of stake”… concepts relate[d] to the creation of cryptocurrency through a process called “mining”.
None of that comes close to being classified information. This is all public knowledge about open source technology.
Griffith did not divulge any top NSA secrets or cybersecurity hacking strategies. He only shared things that anyone could look up on YouTube. So what’s the big deal?
The press release continues, it reports that after the conference Griffith allegedly began:
“formulating plans to facilitate the exchange of Cryptocurrency-1 between DPRK and South Korea. GRIFFITH acknowledged that assisting with such an exchange would violate sanctions against the DPRK…”
These “plans” may have been as simple as suggesting that he could help attendees set up accounts on an exchange that would enable them to trade crypto between North and South Korea. We don’t know.
Nonetheless, according to the International Emergency Economic Powers Act, a piece of legislation that prohibits imports from and exports to US sanctioned countries. This classifies as “forming a conspiracy to undermine the government’s sanctions”. A crime that comes with a penalty of up to 20 years in prison.
For more legally inclined Insiders, you’ll find a thorough analysis of the US government’s case against Griffith here.
But if your main concern is what this means for you and your crypto projects, keep reading.
Better to ask for forgiveness than permission
So what are the main lessons that we can take away from Griffith’s case?
The first thing to note here is that Griffith asked the US government for permission to give this talk. And even though he was told “no”, he still went.
It feels strange having to emphasize this, but if the US government specifically tells you that you can’t do something, then don’t do it. It doesn’t matter how the action stacks up against your morals or ideals. You cannot fight the US government.
It is important to note that this same principle applies to all US regulators. Including those at the SEC.
If you ask the SEC for permission to do something—whether it’s to launch a token or register an offering—you must subsequently do whatever they advise you to do.
For example, if you ask for guidance from the SEC and are told that your token offering needs to be registered, it’s not a good idea to ignore this guidance and launch an unregistered offering anyway.
If you do, then you are just looking for a fight. A fight that you will most likely lose.
In fact, even if you did miraculously win the legal battle, you would undoubtedly be left broke by the end of it. And worst of all, you would have lost the last 5 years of your life in the process.
Don’t get caught up in ideals
Another key lesson that we can take from Griffith’s case is that you will not get very far arguing moral principals.
If the authorities decide that your talk on “Blockchain and Peace” poses a threat to national security and is worthy of 20 years in prison, that’s that. Don’t give the talk!
It does not matter that you simply want to spread awareness of a common technology. Or that you are working to empower individuals under an oppressive regime. There’s not much that you can do about it.
The classic example of this is from Ross Ulbricht, the founder of Silk Road. He argued that his platform was promoting the free market and undermining the destructive war on drugs…
But that didn’t stop the authorities from giving him a double life sentence for facilitating drug trafficking and money laundering.
“One of the things I have realized about the law is that the laws of nature are much like the laws of man. Gravity doesn’t care if you agree with it––if you jump off a cliff you are still going to get hurt. And even though I didn’t agree with the law, I still have been convicted of a crime and must be punished.”
Sadly, with penalties this severe, you cannot afford to take the chance and fight for what you believe.
So now in regards to Griffith’s case, even without knowing any of the details, I can say that the best result for him would be pleading guilty to a lesser offense to try to get a shortened prison sentence.
That would be his best-case scenario.
Trying to fight the charges on ideological or any other grounds would not only be futile but would also maximize his chances of getting the full 20-year penalty.
Unfortunately, it appears that Griffith has pled “not guilty” and is looking to fight his case in court. From the outside, this looks like a terrible decision. One that Griffith may regret for the next 20 years.
What does this mean for Crypto Law Insiders?
Many of crypto’s earliest adopters came to the technology for idealistic purposes. And over the last decade, we’ve seen the incredible potential of crypto and distributed ledger technology. These have been used to undermine legal monopolies, government regulation and monetary policy.
That said, regardless of how we feel about the morality of certain laws, it is still critical for us to exercise precaution. This applies to our speech, personal activities and projects.
Because the fact is that you can’t fight the US government and win. It doesn’t matter whether it’s the State Department, the SEC or the IRS. You can’t win!
The system is at times unfair and arbitrary. Learn to accept it because if you are too determined in your defiance, you could end up spending a long time behind bars.