Five Years in Prison: Is Virgil Griffith the Ross Ulbricht of Ethereum?

Locking up cryptocurrency developers lost in legally murky waters is likely to become more common in the coming years.

Back in 2015, Ross Ulbricht, the founder and main operator of the darknet marketplace Silk Road, was sentenced to a double life sentence without the possibility of parole, plus an additional 40 years in prison and a $183,961,921 fine. Silk Road’s currency of choice was Bitcoin, and while there’s no question that the Darknet lived up to its name, one can only speculate that the U.S. legal system relished the opportunity to ramp up the sentencing process to effectively raise Ulbricht’s jail, Throw away the key.

The poster child for bitcoin crime is Ulbricht, who will almost certainly spend the rest of his life in the US prison system. True, some might say. But when you look at the charges on which he was actually convicted -- money laundering, conspiracy to commit computer hacking, conspiracy to traffic drugs -- some might argue that, in general, such crimes are not subject to double (or triple) Life imprisonment is punished in the United States.

Ulbricht is just that. The Ethereum (ETH) community has now seen one of its own, Virgil Griffith — a former developer and personal friend of co-founder Vitalik Buterin — who was arrested for speaking at a crypto conference in 2019. Detained for more than five years.

Of course, this is no ordinary meeting. It takes place in North Korea. This is not a cliché. It covers issues such as how blockchain technology can be used to evade economic sanctions. The U.S. and the U.N. argue that Pyongyang sees encryption (and crypto hacking) as a means of raising money to pay for its nuclear missile program.

Griffith's speech was not a one-off. He detailed the idea of building a blockchain node to North Korea and tried to convince the Ethereum Foundation that it was a good idea. But Griffith has been in custody for around two years (although more than half of that time has been spent on bail). He now has another 63 to 78 months in jail and a $100,000 fine.

Media outlets such as the Washington Post have labeled Griffith a wayward "tech leader." But is 5 to 6.5 years in prison really necessary?

Angle: After the U.S. Treasury Department’s Office of Foreign Assets Control settled with TD Bank late last year, the latter admitted that between December 2016 and August 2018 it “processed 1,479 transactions totaling $382,685.38 and maintained nine accounts on behalf of 5 employees of North Korea’s mission to the United Nations.”

But for Griffith, things might actually be worse. Sanctions violations carry a potential 20-year sentence, and only a plea deal appears to reduce that sentence to single digits.

But some inevitably wondered whether Griffith might not have received a lighter sentence if he hadn't made it through the U.S. legal system at such a sensitive time.

While the U.S. and its allies are ramping up sanctions on Russia, courts and prosecutors are likely to feel they have a duty to ensure that Griffith's sentence shows that when the U.S. starts talking about sanctions, he means business.

Courts may feel that whenever they confront technology first, they need to make a public and compelling judgment. In Griffith's case, perhaps the court decided that being the first to bring ETH to the dark side meant he needed to be held up as an example.

But while members of the crypto community may demand greater leniency, there’s no question that the weight of public opinion is on the court’s side. When Joe Public reads that a crypto “guru” who used his power to help America’s enemies evade sanctions was imprisoned and fined, his most likely reaction was: “He deserved it.”