There is a big crypto conference from Feb. 22 through 29. No matter how much you like cryptocurrency, you shouldn’t attend.
Why? Because if you’re American, and you show up at this conference, it could land you 20 years in jail.
North Korea is holding its annual blockchain and cryptocurrency conference toward the end of February. Sanctions experts from the United Nations are putting out an obvious warning: Don’t go, because you’ll probably get in trouble if you do.
A soon-to-be-published report notes that past North Korea crypto conferences “have included explicit discussions of cryptocurrency for sanctions evasion and money laundering.”
The U.N. estimates North Korea made $2 billion or more in 2019 via “widespread and increasingly sophisticated” cryptocurrency cyberattacks against individuals, exchanges, and banks.
On a website advertising the upcoming crypto conference, North Korea promised American attendees their passports would not be stamped, “so there will be no evidence of your entry to the country.”
The North Korean site further noted that “your participation will never be disclosed from our side unless you publicize it on your own.”
Nonetheless, there are ways to get caught — as Virgil Griffith found out.
Virgil Griffith was a research scientist and developer associated with Ethereum, one of the highest profile cryptocurrencies.
In November of last year, Griffith was arrested for attending the 2019 North Korea conference, hosted in April, after the U.S. Department of State had denied him permission to travel to North Korea.
After spending Christmas in a cell, Griffith was later granted $1 million bail — though it isn’t clear whether he is free or still incarcerated as of this writing.
As a U.S. citizen, Griffith is charged with violating the International Emergency Economic Powers Act, the text of which can be found here; if found guilty, he is facing 20 years in prison.
The crypto community is appalled in different ways by Griffith’s case.
On the one hand, the Griffith prosecution is seen as a gross violation of privacy rights and freedom of speech. It doesn’t seem right to threaten someone with prison just for sharing their knowledge of cryptocurrencies and the blockchain.
On the other hand, the idea of giving valuable technical knowledge to North Korea — a regime that starves its own people, executes dissidents with anti-aircraft guns, and steals billions to fund a nuclear weapons program — is even more appalling.
“[The] least cyberpunk thing you could possibly imagine would be to aid and abet the world’s most vicious tyranny,” said Alex Gladstein of the Human Rights Foundation, calling Griffith’s trip “a total travesty and a betrayal of all the values that went into the creation of Bitcoin and Ethereum.”
Either way, in attending last year’s conference without State Department permission, Griffith probably assumed he wouldn’t get caught. Now he is paying for that mistake.
On a broader level, we are likely to see governments crack down even harder on illegal crypto activities in 2020. Various agencies tasked with anti-money-laundering (AML) initiatives could also step up their scrutiny of offshore crypto accounts and so-called “privacy coins.”
The twin threats of organized crime and terrorism funding will be used to justify these crackdown actions. If North Korea is stealing billions, that is only the tip of the iceberg.
Ironically, though, increased pressure from government agencies could be bullish for the king of all cryptos, Bitcoin, because Bitcoin’s “killer use case” is wholly above board and attractive to legal users.
In its role as “digital gold,” Bitcoin is becoming an increasingly desirable store of value for legal investment entities, like wealthy investors, hedge funds, and institutions.
“It’s clear that we’re experiencing institutional adoption,” said Michael Sonnenshein, a managing director at the Grayscale Investment Trust. “The asset class is experiencing increased validation from legacy companies like Fidelity and CME,” he told Bloomberg, “signaling to institutions and the investment community as a whole that crypto as an asset class is here to stay.”
And so, to the degree government agencies take harsh actions that block alternative cryptos from gaining traction, or otherwise reduce the scope of Bitcoin competition, Bitcoin gets an even stronger hold.
So, don’t worry about Bitcoin, even if the anti-crypto drumbeats start to get louder. But whatever you do, don’t attend any North Korea crypto events!
TradeSmith Research Team