U.S Sanctions have turned out to be quite strict over the years especially due to the nation’s anti-terrorism efforts. Penalties for most sanction violations have also seen a steep rise. The list of countries subject to U.S sanctions is quite tedious, but some notable names on the list include North Korea, Iran, Venezuela, Central African Republic, etc. These sanctions often end up putting the targeted nation under economic distress, which in turn impels them to look for ways to bypass the sanction.
North Korea is the most notorious name on the list of sanctioned countries. The nation has been utilizing cryptocurrencies to garner extra funds to boost their weapons programmes while bypassing U.S sanctions. They have carried out a number of hacks and ransomware attacks and have even been accused of laundering crypto funds using a blockchain company located in China.
In a surprising revelation by the United States Attorney’s Office, an American citizen was found guilty of aiding North Korea in avoiding U.S sanctions, using cryptocurrencies and has now been arrested and will be charged with violation of the International Emergency Economic Powers Act (IEEPA).
36-year-old Virgil Griffith is an American programmer, he is quite popular within the crypto community as he has been working as a developer for Ethereum. Griffith has been accused of providing information to North Korea about how cryptocurrencies could be used to bypass U.S sanctions and “launder money” during his presentation titled “Blockchain and Peace” in Pyongyang and could now face 20 years in prison.
As per the announcement, Griffith supposedly attended the conference against the permission of the U.S department of State. An excerpt from the announcement reads:
“GRIFFITH presented at the DPRK Cryptocurrency Conference, knowing that doing so violated sanctions against the DPRK. At no time did GRIFFITH obtain permission from the Office of Foreign Assets Control (OFAC) to provide goods, services, or technology to the DPRK.”
North Korea is also in the early stages of deploying a cryptocurrency that will allow it to evade international sanctions and “circumvent the U.S.-dominated global financial system.” Alongside this, the UN even reported that North Korea has already managed to steal as much as $2 billion via illicit crypto mining and hacks.
With the growing popularity of cryptocurrencies and the various advantages related to its decentralized and anonymous nature, various nations have turned towards these digital currencies to battle U.S sanctions levied on them. For instance, it was reported that Venezuela was developing a cryptocurrency payments methods “for free national and international payments.” The nation’s president Nicolas Maduro said:
“Donald Trump and his sanctions are blocking Venezuela from carrying out transaction in any of the world’s banks. There are other formulas to pay, and it’s what we’re using, because our payment system works perfectly in China and Russia.”
These events raise serious concerns in the eyes of the authorities about how the cryptocurrencies are being used as a tool to work against government protocol. Even though cryptocurrencies weren’t created to be used this way, it could very well face serious backlash in the future if this continues. However, what’s most concerning at the moment is the question that would countries like North Korea be able to succeed in their endeavours while defaming cryptocurrencies along the way.