The imprisonment of crypto developers who stray into murky legal waters could become a common occurrence in the years to come.
In 2015, Ross Ulbrichtcreator and main operator of the marketplace Silk Road, had been sentenced to a double sentence of life in prison without the possibility of parole, an additional sentence of 40 years and a fine of 183,961,921 USD. Silk Road’s currency of choice was Bitcoin (BTC), and while there’s no doubt that the darknet more than lived up to its name, one can only assume that the US justice system relished the opportunity to return the more dramatic sentencing process to lock up Ulbricht.
Bitcoin crime has its poster child in Ulbricht, who will almost certainly spend the rest of his life in the US prison system. Rightly so, some would say. But considering the counts for which he was convicted – money laundering, conspiracy to hack into computer hacking and conspiracy to traffic narcotics – some might argue that such crimes, in general, are not punishable by double (or triple) life imprisonment in the United States.
So much for Ulbricht. The Ethereum (ETH) community just saw one of its own, Virgil Griffith – a former developer and personal friend of the co-founder Vitalik Buterin – locked up for more than five years for giving a speech at a crypto conference in 2019.
Of course, this was not just any conference. It was held in North Korea. And it was not a trivial speech. It covered many topics, including how to use blockchain technology to evade economic sanctions. The United States and the UN believe that Pyongyang sees crypto (and crypto hacking) as a way to raise money to pay for its nuclear and missile program.
And Griffith was not content with a one-off speech. He reportedly discussed in detail with North Korea the idea of setting up a blockchain node and tried to convince the Ethereum Foundation that was a good idea. But Griffith has already spent some two years in custody (although more than half of that time was spent on bail). He must now spend another 63 to 78 months behind bars and pay a fine of 100,000 USD.
Media outlets like the Washington Post were quick to call Griffith a “tech guru.” But is a sentence of five to six and a half years in prison really necessary in this case?
To put things into perspective:Treasury Office of Foreign Assets Control reached an agreement at the end of last year with TD Bank after the latter admitted that between December 2016 and August 2018, it “processed 1,479 transactions totaling [USD] 382,685.38 and maintained nine accounts on behalf of five employees of the North Korean Mission to the United Nations”.
But things could have been even worse for Griffith. Penalty violations can be punished with 20-year sentences, and it appears only a plea deal reduced the sentence.
Some will inevitably wonder if Griffith might not have been given a slightly lighter sentence had he not been subjected to the US legal system at such a sensitive time.
As the United States and its allies increase sanctions against Russia, the court and prosecutors may have felt it their duty to ensure that Griffith’s sentence shows the seriousness of Uncle Sam regarding sanctions.
But while members of the crypto community can call for greater leniency, there is no doubt that the weight of public opinion is on the side of the courts. When the public reads that cryptocurrency “gurus” who used their powers to help America’s enemies evade sanctions have been jailed and fined, their most likely reaction will be: “Well done for him.”
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