Unexpected guilty plea in North Korea case shows crypto's wild and defiant days are coming to an end
Ethan Lou: The idealistic, devil-may-care attitude for which crypto is known, and which Griffith exemplifies, is fast becoming a spent force
Author of the article: Ethan Lou, Special to Financial Post
Publishing date:Oct 07, 2021 •
Virgil Griffith plead guilty last week in New York City in his North Korea-cryptocurrency case, taking a plea deal for up to six-and-a-half years in prison.
PHOTO BY LULU LORIEN
It was definitely a surprise seeing Virgil Griffith plead guilty last week in New York City in his North Korea-cryptocurrency case, taking a plea deal for up to six-and-a-half years in prison.
For nearly two years, the American citizen and former Ethereum Foundation executive had been fighting a charge of trying to help North Korea break sanctions through a 2019 talk about blockchain in that country — a case at the unique confluence of technology, finance and geopolitics that has shocked and disturbed observers. Then on the first day of what was supposed to be a two-week trial, Griffith gave up that fight.
It’s unclear what specifically sparked the reversal and Griffith’s lawyers have not elaborated publicly on the rationale. But as important as the motivation is the implication. As someone who had been in North Korea with Griffith and followed the case closely, I could not help but feel that the conclusion of the case symbolizes a wider cryptocurrency capitulation. That idealistic, devil-may-care attitude for which this field is known, and which Griffith exemplifies, is fast becoming a spent force.
That does not mean, of course, that there will be no more crypto crime cases, or that the scrappy industry will find eternal peace with rules and regulators. Just this year, a libertarian in Keene, New Hampshire, was arrested for allegedly selling bitcoin with no regard for where the resulting money came from. There will always be such cases.
It’s just that the accused will no longer be seen as defining the industry, and they will be less likely to be major figures known outside it. (Who but the crypto folks have heard of Ian Freeman from the city of Keene, anyway?) And the truly defiant are finding more pragmatic methods, such as when the noted exchange ShapeShift said it would become an uncontrollable, decentralized entity. As the crypto world moves on from the Griffith case, it will become only more orderly, more pleasing to investors, more serious.
I could not help but feel that the conclusion of the case symbolizes a wider cryptocurrency capitulation
In the public’s consciousness, at least, such crypto crimes first came about more than five years ago, when the American entrepreneur Charlie Shrem went to prison for flouting money-laundering rules for his BitInstant brokerage. He became known as the proverbial “first felon,” the earliest notable figure in this freewheeling world to butt against constraints and consequences.
Shrem’s case would exemplify a special type of crypto crime. Shrem did not steal anything or maim anyone. He did not believe he was actively trying to inflict harm. He had simply not given a lot of heed to the established rules. Now, Griffith’s case marks the crescendo in the bitter ballad that began with Shrem.
As he admitted, Griffith did break the law. But he had not sought to harm anyone and had derived no benefit for himself. The defence has long maintained that Griffith’s presentation in North Korea amounted to no more than publicly available information. He never tried to hide anything. In fact, I remember Griffith talking about meeting U.S. officials to tell them about the trip. “As a friend of his told me, Griffith views life as a role-playing video game, and the conference was just another quest,” a journalist wrote recently in an industry publication.
Such have been crypto’s escalating growing pains. They had symbolically started with Shrem. Then Ross Ulbricht — who believed that people should have the freedom to buy whatever drugs they wanted, as long as they were not directly harming others — got two life sentences for running the Silk Road marketplace. Now North Korea. Griffith’s sentence will be far lower than Ulbricht’s, but the deed is arguably the most outlandish and attention grabbing.
In that respect, it’s going to be tough to find a crypto crime to top Griffith’s, and the whimpering conclusion to the case last Monday was heard around the world. Journalists like me watched as Griffith sighed repeatedly, told the court he had depression and incorrectly stated his own age, the weight of an uphill two-year fight heavy upon him. Even without the government press release afterward, the message the U.S. justice department had wanted to send was starkly clear. After such a climax, the only way forward is downhill.
Back in the day, this field had even less legitimacy, and many early bitcoiners had came from society’s fringes. Then, however, came the suits to build order out of chaos — like, for example, the Winklevoss twins of Facebook fame. Tellingly, when investing in a crypto startup, they had almost immediately clashed with an earlier libertarian investor named Roger Ver. That startup was none other than Shrem’s BitInstant. The ensuing criminal case marred that Winklevoss-Ver partnership, and over the years, more moderate and pragmatic forces would increasingly squeeze crypto’s less-mainstream aspects.
Griffith’s case and his public admission of defeat mark a pivotal moment in that jockeying. The wild and chaotic side of crypto is in decline, perhaps for good.
Ethan Lou is a journalist and author of Once a Bitcoin Miner: Scandal and Turmoil in the Cryptocurrency Wild West, to be released Oct. 19.
It was definitely a surprise seeing Virgil Griffith plead guilty last week in New York City in his North Korea-cryptocurrency case, taking a plea deal for up to six-and-a-half years in prison.
For nearly two years, the American citizen and former Ethereum Foundation executive had been fighting a charge of trying to help North Korea break sanctions through a 2019 talk about blockchain in that country — a case at the unique confluence of technology, finance and geopolitics that has shocked and disturbed observers. Then on the first day of what was supposed to be a two-week trial, Griffith gave up that fight.
It’s unclear what specifically sparked the reversal and Griffith’s lawyers have not elaborated publicly on the rationale. But as important as the motivation is the implication. As someone who had been in North Korea with Griffith and followed the case closely, I could not help but feel that the conclusion of the case symbolizes a wider cryptocurrency capitulation. That idealistic, devil-may-care attitude for which this field is known, and which Griffith exemplifies, is fast becoming a spent force.
That does not mean, of course, that there will be no more crypto crime cases, or that the scrappy industry will find eternal peace with rules and regulators. Just this year, a libertarian in Keene, New Hampshire, was arrested for allegedly selling bitcoin with no regard for where the resulting money came from. There will always be such cases.
It’s just that the accused will no longer be seen as defining the industry, and they will be less likely to be major figures known outside it. (Who but the crypto folks have heard of Ian Freeman from the city of Keene, anyway?) And the truly defiant are finding more pragmatic methods, such as when the noted exchange ShapeShift said it would become an uncontrollable, decentralized entity. As the crypto world moves on from the Griffith case, it will become only more orderly, more pleasing to investors, more serious.
I could not help but feel that the conclusion of the case symbolizes a wider cryptocurrency capitulation
In the public’s consciousness, at least, such crypto crimes first came about more than five years ago, when the American entrepreneur Charlie Shrem went to prison for flouting money-laundering rules for his BitInstant brokerage. He became known as the proverbial “first felon,” the earliest notable figure in this freewheeling world to butt against constraints and consequences.
Shrem’s case would exemplify a special type of crypto crime. Shrem did not steal anything or maim anyone. He did not believe he was actively trying to inflict harm. He had simply not given a lot of heed to the established rules. Now, Griffith’s case marks the crescendo in the bitter ballad that began with Shrem.
As he admitted, Griffith did break the law. But he had not sought to harm anyone and had derived no benefit for himself. The defence has long maintained that Griffith’s presentation in North Korea amounted to no more than publicly available information. He never tried to hide anything. In fact, I remember Griffith talking about meeting U.S. officials to tell them about the trip. “As a friend of his told me, Griffith views life as a role-playing video game, and the conference was just another quest,” a journalist wrote recently in an industry publication.
Such have been crypto’s escalating growing pains. They had symbolically started with Shrem. Then Ross Ulbricht — who believed that people should have the freedom to buy whatever drugs they wanted, as long as they were not directly harming others — got two life sentences for running the Silk Road marketplace. Now North Korea. Griffith’s sentence will be far lower than Ulbricht’s, but the deed is arguably the most outlandish and attention grabbing.
In that respect, it’s going to be tough to find a crypto crime to top Griffith’s, and the whimpering conclusion to the case last Monday was heard around the world. Journalists like me watched as Griffith sighed repeatedly, told the court he had depression and incorrectly stated his own age, the weight of an uphill two-year fight heavy upon him. Even without the government press release afterward, the message the U.S. justice department had wanted to send was starkly clear. After such a climax, the only way forward is downhill.
Back in the day, this field had even less legitimacy, and many early bitcoiners had came from society’s fringes. Then, however, came the suits to build order out of chaos — like, for example, the Winklevoss twins of Facebook fame. Tellingly, when investing in a crypto startup, they had almost immediately clashed with an earlier libertarian investor named Roger Ver. That startup was none other than Shrem’s BitInstant. The ensuing criminal case marred that Winklevoss-Ver partnership, and over the years, more moderate and pragmatic forces would increasingly squeeze crypto’s less-mainstream aspects.
Griffith’s case and his public admission of defeat mark a pivotal moment in that jockeying. The wild and chaotic side of crypto is in decline, perhaps for good.
Ethan Lou is a journalist and author of Once a Bitcoin Miner: Scandal and Turmoil in the Cryptocurrency Wild West, to be released Oct. 19.
No comments:
Post a Comment