Case 1:20-cr-00015-PKC Document 1 Filed 11/21/19 Page 1 of 8
`
`ORIGINAL
`
`Approved:
`
`United States
`
`. WIRSHBA
`
`Before:
`
`HONORABLE SARAH NETBURN
`United States Magistrate Judge
`Southern District of New York
`
`- - - - - - - - - - - - - - - - - - X
`
`UNITED STATES OF AMERICA
`
`- v. -
`
`VIRGIL GRIFFITH,
`
`Defendant.
`
`- - - - - - - - - - - - - - - - - - X
`
`SOUTHERN DISTRICT OF NEW YORK, ss.:
`
`SEALED COMPLAINT
`
`Violation of
`50 u.s.c. § 1705
`
`COUNTY OF OFFENSE:
`NEW YORK
`
`BRANDON M. CAVANAUGH, being duly sworn, deposes and
`says that he is a Special Agent with the Federal Bureau of
`Investigation (the "FBI"), and charges as follows:
`
`COUNT ONE
`(Conspiracy to Violate the
`International Emergency Economic Powers Act)
`
`From at least in or about August 2018, up to and
`l.
`including in or about November 2019, in the Southern District of
`New York, North Korea, and elsewhere outside of the jurisdiction
`of any particular State or district of the United States, VIRGIL
`GRIFFITH, the defendant, and others known and unknown, at least
`one of whom is expected to be first brought to and arrested in
`the Southern District of New York, knowingly and willfully did
`combine, conspire, confederate, and agree together and with each
`other to violate licenses, orders, regulations, and prohibitions
`in and issued under the International Emergency Economic Powers
`Act ("IEEPA"), codified at Title 50, United States Code,
`Sections 1701-1706.
`
`It was a part and an object of the conspiracy
`2.
`that VIRGIL GRIFFITH, the defendant, and others known and
`unknown, would and did provide and cause others to provide
`
`

`

`Case 1:20-cr-00015-PKC Document 1 Filed 11/21/19 Page 2 of 8
`
`services to the Democratic People's Republic of Korea ("DPRK" or
`"North Korea"), without first obtaining the required approval of
`the U.S. Treasury Department's Office of Foreign Asset Control
`("OFAC"), in violation of 50 U.S.C. § 1705(a), 31 C.F.R.
`§§ 510.206(a), 510.212(b), and Executive Orders 13466 and 13722.
`
`It was further a part and an object of the
`3.
`conspiracy that VIRGIL GRIFFITH, the defendant, and others known
`and unknown, would and did evade and avoid, and attempt to evade
`and avoid, the requirements of U.S. law with respect to the
`provision of services to the DPRK,
`in violation of 50 U.S.C.
`§ 1705(a), 31 C.F.R. §§ 510.212(a)-(b), and Executive Orders
`13466 and 13722.
`
`(Title 50, United States Code, Section 1705;
`Executive Orders 13466 and 13722;
`Title 18, United States Code, Section 3238.)
`
`The bases for my knowledge and the foregoing charge
`are, in part, as follows:
`
`I am a Special Agent with the FBI, currently
`1.
`assigned to the FBI's Counterintelligence Division. This
`Affidavit is based upon my personal participation in the
`investigation, my examination of reports and records, and my
`conversations with other law enforcement agents and other
`individuals. Because this Affidavit is being submitted for the
`limited purpose of demonstrating probable cause, it does not
`include all the facts that I have learned during the course of
`my investigation. Where the contents of documents and the
`actions, statements, and conversations of others are reported
`herein, they are reported in substance and in part, except where
`otherwise indicated.
`
`Overview
`
`In or about April 2019, VIRGIL GRIFFITH, the
`~-
`defendant, traveled to the DPRK to attend and present at the
`"Pyongyang Blockchain and Cryptocurrency Conference" (the "DPRK
`Cryptocurrency Conference"). The U.S. State Department denied
`GRIFFITH permission to go to the DPRK to attend the DPRK
`Cryptocurrency Conference due to the DPRK Sanctions, but
`GRIFFITH nonetheless traveled to the DPRK, via China, in order
`to participate. At the DPRK Cryptocurrency Conference, in
`violation of the DPRK Sanctions, GRIFFITH gave a presentation on
`topics that were pre-approved by DPRK officials, provided the
`DPRK with valuable information on blockchain and cryptocurrency
`technologies, and participated in discussions regarding using
`
`2
`
`

`

`Case 1:20-cr-00015-PKC Document 1 Filed 11/21/19 Page 3 of 8
`
`cryptocurrency technologies to evade sanctions and launder
`money . After the DPRK Cryptocurrency Conference , GRIFFITH also
`encouraged other U.S . c i tizens to travel to the DPRK.
`
`The DPRK Sanctions
`
`The IEEPA , codified at Title 50, United States
`6 .
`Code , Sec t ions 1701 - 1706 , confers upon the President authority
`to deal with unusual and extraordinary threats to the national
`s ecurity and foreign policy of the United States . Section 1705
`provides , in part , that " [i]t shall be unlawful for a person to
`violate , attempt to violate, conspire to violate, or cause a
`vio l ation of any license , order , regulation , or prohibition
`issued under this title." 50 U.S . C . § 1705(a).
`
`Beginning with Executive Order 13466, issued on
`! .
`June 26, 2008 , the President found that the situation "on the
`Korean Peninsu l a constitute[s] an unusual and extraordinary
`threat to the national security and foreign policy of the United
`States and .
`. declare[d] a national emergency to deal with
`that threat. "
`
`Following the issuance of Executive Order 13466 ,
`8 .
`OFAC promulgated the North Korea Sanctions Regulations ("NKSR")
`to further implement the DPRK Sanctions . See 31 C . F.R. Part 510 .
`
`On March 18 , 2016, the President issued Executive
`9 .
`Order 13722 , wh i ch prohibited both "the exportation or
`reexportation , direct or indirect , from the United States, or by
`a United States person , wherever located , of any goods,
`services, or technology to North Korea" and "any approval,
`financing , fac i litat i on , or guarantee by a United States person ,
`wherever loca ted , of a transaction by a f6reign person where the
`transaction by that foreign person would be prohibited by this
`section if per f ormed by a United States person or within the
`United States ."
`
`l C. Executive Order 13722 also prohibits transactions
`that evade or avoid , have the purpose of evading or avoiding,
`cause a violation of , or attempt to violate the terms of the
`Order .
`
`11. Pursuant to Executive Order 13722, and to
`incorporate certain other legislation, OFAC amended and reissued
`the NKSR in their entirety on March 5 , 2018. Since that time,
`the NKSR specifically prohibit , among other things , the
`"exportation or reexportation , directly or indirectly, from the
`United States , or by a U. S . person, wherever located, of any
`
`3
`
`

`

`Case 1:20-cr-00015-PKC Document 1 Filed 11/21/19 Page 4 of 8
`
`goods , services , or technology to North Korea," "[a]ny
`transaction .
`. that evades or avoids, has the purpose of
`evading or avoiding, c aus es a violation of , or attempts to
`violate any of the prohibitions set forth in this part," and
`"[a]ny conspiracy formed to violate the prohibitions set forth
`in this part." 31 C .F.R. §§ 510.206(a), 510 . 212(a)-(b) . Thus ,
`under OFAC 's regulations , "U . S . persons may not, except as
`authorized by or pursuant to this part, provide legal,
`accounting , financial, brokering, freight forwarding ,
`transportation , public relations, or other services to any
`person in North Korea or to the Government of North Korea." Id.
`§ 510 . 405 (d) (1).
`
`Griffith's Cryptocurrency Expertise
`
`12. Cryptocurrency is a decentralized, peer-to-peer
`form of electronic currency that can be digitally traded and
`functions as (1) a medium of exchange;
`(2) a unit of account;
`and/or (3) a store of value, but does not have legal tender
`status. Unlike "fiat currency ," such as the U.S. dollar and the
`Euro, cryptocurrency is not issued by any jurisdiction and
`functions only by agreement within the community of users of
`that particular currency.
`
`13. A blockchain is a public, distributed electronic
`ledger that, among other things, records cryptocurrency
`transfers . The blockchain only records the movement of
`cryptocurrency ; it does not by itself identify the parties to
`the transfer. As a result, the users can remain anonymous .
`
`14
`Based on my review of publicly available sources,
`I know , among other things, that :
`
`VIRGIL GRIFFITH , the defendant, possesses a
`a.
`doctorate from the California Institute of Technology in
`computational and neural systems, and a bachelors of science in
`computer and cognitive science from the University of Alabama.
`
`GRIFFITH is employed by an entity that
`b.
`functions as an open - source platform for the development of
`blockchain and cryptocurrency technologies, including, among
`other things , a particular type of the cryptocurrency
`("Cryptocurrency- 1") . Cryptocurrency-1, like other
`cryptocurrencies, is not issued by any government or bank, but
`is instead generated and controlled through computer software
`operating on a decentralized peer-to - peer network.
`
`Griffith's May 22, 2019 Admissions
`
`4
`
`

`

`Case 1:20-cr-00015-PKC Document 1 Filed 11/21/19 Page 5 of 8
`
`15. On or about May 22, 2019, I participated in a
`consensual interview of VIRGIL GRIFFITH, the defendant, in
`Manhattan, New York (the "May 22 Interview"). Based on my
`participation in that May 22 Interview, I know that GRIFFITH
`stated, among other things, the following in substance and in
`part:
`
`in Singapore.
`
`a.
`
`GRIFFITH is a United States citizen living
`
`In or about April 2019, GRIFFITH traveled to
`b.
`the DPRK to attend and make a presentation at the DPRK
`Cryptocurrency Conference.
`
`GRIFFITH knew that it was illegal to travel
`c.
`to the DPRK and so sought permission from the U. S . Department of
`State to travel to the DPRK. Although GRIFFITH's request was
`denied by the State Department, GRIFFITH attended the DPRK
`Cryptocurrency Conference nonetheless.
`
`To facilitate his travel to the DPRK
`d.
`Cryptocurrency Conference, GRIFFITH worked with a particular
`individual ("CC-1"), who assisted GRIFFITH in arranging travel
`to the DPRK. As part of that process, GRIFFITH communicated by
`email with, among others, CC-1 and a DPRK diplomatic mission
`facility in Manhattan, New York (the "DPRK Mission").
`
`GRIFFITH secured a visa to travel to the
`e.
`DPRK through the DPRK Mission. GRIFFITH paid one hundred Euro
`for his v isa and elected to receive his visa on a separate paper
`instead of affi xing the document to his U.S. passport. GRIFFITH
`chose the separate paper for the visa in an effort to avoid
`creating physical proof of his travel to the DPRK in his U.S.
`passport.
`
`On or about April 18 , 2019 , GRIFFITH
`f.
`traveled to the DPRK through China.
`
`On or about April 26 and April 27 , GRIFFITH
`g.
`attended the DPRK Cryptocurrency Conference in Pyonyang along
`with approximately 100 other attendees.
`
`During the DPRK Cryptocurrency Conference,
`h.
`an organizer of the DPRK Cryptocurrency conference ("CC- 2") told
`GRIFFITH that, during his presentation, GRIFFITH should stress
`the potential money laundering and sanction evasion applications
`
`5
`
`

`

`Case 1:20-cr-00015-PKC Document 1 Filed 11/21/19 Page 6 of 8
`
`of cryptocurrency and blockchain technology as such topics were
`most likely to resonate with the DPRK audience.
`
`At the DPRK Cryptocurrency Conference,
`i.
`GRIFFITH and other attendees discussed how blockchain and
`cryptocurrency technology could be used by the DPRK to launder
`money and evade sanctions, and how the DPRK could use these
`technologies to achieve independence from the global banking
`system. GRIFFITH ' s presentation at the DPRK Cryptocurrency
`Conference was titled "Blockchain and Peace , " and he discussed,
`among other things, how a blockchain technology, includi~g a
`"smart contract ," could be used to benefit the DPRK. GRIFFITH
`identified several DPRK Cryptocurrency Conference attendees who,
`during his presentation , asked more specific questions of
`GRIFFITH and prompted discussions on technical issues such as
`"proof of work" versus ''proof of stake . " I know from my
`training, experience , discussions with other law enforcement
`officers and open source reporting, that these concepts relate
`to the creation of new cryptocurrency through a process called
`"mining."
`
`j. After the DPRK Cryptocurrency Conference ,
`GRIFFITH began formulating plans to facilitate the exchange of
`Cryptocurrency-1 between the DPRK and South Korea. GRIFFITH
`acknowledged that assisting with such an exchange would violate
`sanctions against the DPRK, but stated that he wished to return
`to the DPRK and attend the same DPRK Cryptocurrency Conference
`the following year.
`
`GRIFFITH showed FBI agents photographs of
`k .
`himself in the DPRK and provided to FBI propaganda from the
`DPRK,
`including newspapers and other literature.
`
`Griffith's Electronic Communications
`
`16 . Based on my participation in this investigation,
`I know that on or about November 12, 2019, VIRGIL GRIFFITH, the
`defendant , consented in writing to a search of his cellphone
`(the "Cellphone"). Based on my review of an extraction of the
`Cellphone ,
`I know , among other things, the following :
`
`On or about November 26 , 2018, GRIFFITH
`a .
`discussed his presentation with another individual ("Individual -
`1") through electronic phone messages . Individual-1 asked, in
`sum and substance, what interest North Koreans had in
`cryptocurrency. GRIFFITH replied, in sum and substance,
`"probably avoiding sanctions .
`. who knows."
`
`6
`
`

`

`Case 1:20-cr-00015-PKC Document 1 Filed 11/21/19 Page 7 of 8
`
`Following the May 22 Interview, on or about
`b.
`August 6 , 2019 , GRIFFITH sent an electronic message to a
`particular individual ("Individual-2") that stated, in sum and
`substance, "I need to send 1 [unit of Cryptocurrency-1) between
`North and South Korea." In response, Individual-2 asked , in sum
`and substance, "Isn't that violating sanctions?" GRIFFITH
`replied, "it is . "
`
`Electronic messages from the Cellphone also
`c .
`reflect that GRIFFITH contacted at least two other United States
`citizens to encourage them , in sum and substance, to travel to
`the DPRK .
`
`Griffith ' s November 12 , 2019 Admissions
`
`I know from my participation in this
`17 .
`investigation that on or about November 12, 2019, myself and
`another FBI agent conducted a consensual interview of GRIFFITH
`in San Francisco, California (the "November 12 Interview").
`Based on my participation in that November 12 Interview, I know
`that GRIFFITH stated, among other things, the following in
`substance and in part:
`
`GRIFFITH discussed in more detail his
`a .
`presentation in the DPRK. He stated, in sum and substance, that
`the DPRK government approved the topics within his presentation
`in advance and that, in his estimation, attendees left the DPRK
`Cryptocurrency Conference with a better understanding of
`cryptocurrency and blockchain than when they arrived. GRIFFITH
`claimed that this information included basic concepts accessible
`on the internet .
`
`GRIFFITH acknowledged that his presentation
`b.
`at the DPRK Cryptocurrency Conference amounted to a "non-zero
`tech transfer," that is , a transfer of technical knowledge from
`GRIFFITH to other attendees .
`
`GRIFFITH expressed a desire to obtain
`c .
`citizenship in another jurisdiction.
`
`18 . Based on my review of law enforcement records and
`discussions with other United States Government employees, I
`know that VIRGIL GRIFFITH , the defendant, did not seek or
`receive approval from OFAC to travel to or provide services to
`the DPRK.
`
`7
`
`

`

`. '
`
`Case 1:20-cr-00015-PKC Document 1 Filed 11/21/19 Page 8 of 8
`
`WHEREFORE , the deponent respectfully requests that a
`warrant issue for the arrest of VIRGIL GRIFFITH, the defendant,
`and that he be arrested and imprisoned or bailed, as the case
`may be .
`
`BRANDON M. CAVA'NA.UGH
`Special Agent, FBI
`
`Judge
`York
`
`-. ...
`
`--·
`
`8
`
`