Intelligence: CryptoCriminal Compromised And Captured

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December 31, 2019: Enforcing the economic sanctions on North Korea leads to encountering and dealing with some strange situations. An example of this was the recent arrest of Virgil Griffith, an American software engineer who works in Singapore for Etherium, a cryptocurrency operation. Griffith was accused of aiding North Korea in using cryptocurrency to evade economic sanctions. Griffith was planning to renounce his American citizenship and purchase citizenship from one of the several small nations which offer that along with discreet banking services. Apparently Griffith did not realize that American sanctions enforcement efforts include monitoring any contacts between North Korea and cryptocurrency operations. It was also no secret that international bank security organizations were watching North Korea closely because North Korean hackers were believed responsible for several major thefts of cryptocurrency via hacking.

Despite all this, earlier in 2019 Griffith asked the U.S. for permission to travel to North Korea to attend a conference. The request was turned down and Griffith came to New York where there was an organization that would, for a price, provide a visa to enter North Korea. Griffith then traveled to China and used the visa to get into North Korea. His goal was to give a presentation at the Pyongyang Blockchain and Cryptocurrency Conference, an event several intelligence and Internet security agencies were watching carefully. Griffith’s talk was called “Blockchain and Peace” and he explained to the hundred conference attendees (most foreign but including several North Korea officials) how cryptocurrency could be used to enable North Korea to operate free of any dependence on the international banking system. The North Korean government was interested and Griffith was willing to help. He was making plans for the 2020 Pyongyang Blockchain and Cryptocurrency Conference, and for a while seemed oblivious that he was committing a growing list of crimes or that the FBI was investigating his activities. The FBI is also arrested a Griffith associate. If prosecuted and convicted, Griffith could be sentenced to 20 years in prison.

The UN recently reported that North Korea has managed to continue many smuggling efforts, especially those for obtaining petroleum, but is also developing new criminal procedures. These work for a while, until discovered and disrupted by an international coalition led by the United States which has the authority to punish banks and other commercial firms involved in the scams. That means North Korea pays more and more to get petroleum and other sanctioned goods. The UN analysts found that North Korea has also come up with more ways to raise foreign currency. Computer hacking is a primary source and one major heist was a series of hacks on cryptocurrency operations that obtained several hundred million dollars of crypto cash perfectly suited to finance smuggling operations. That took place between 2015 and 2018 but after that, the spotlight was on North Korean efforts to keep at it and that ended their cryptocurrency jackpot. Foreign economists believe the increased sanctions have caused the North Korea GDP to shrink 5 percent so far. That percentage is increasing. Trends like this cannot be safely ignored.

Griffith seems to have believed he could handle any sanctions or police scrutiny. He had committed less serious software-related crimes before and was not imprisoned. North Korea is still seeking foreign cryptocurrency experts willing to help, for a fee. It is unclear if the North Koreans warned Griffith about the risks he was taking outside of North Korea. There was apparently some awareness because of his plans to renounce his U.S. citizenship and become a citizen of some small island state. It is unclear is anyone explained to him that those moves would not protect him from American investigators and prosecutors. Indeed, these moves seemed to confirm any suspicions of guilt. More details may come out during the trial.

 


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