DoJ charges 2 Europeans with aiding DPRK to evade sanctions

TL;DR Breakdown

• The United States Department of Justice (DoJ) charges two Europeans with conspiracy to help North Korea evade sanctions.
• Alejandro and Christopher used cryptocurrency and blockchain technology to circle political and economic sanctions.

On Monday, the United States Department of Justice (DoJ) announced the indictment of two Europeans for crypto fraud. The two stand accused of collaborating with a recently imprisoned cryptocurrency researcher to assist North Korea in avoiding U.S. sanctions. According to Manhattan prosecutors, Cao de Benos, 47, and Emms, 30, could face up to 20 years in jail for conspiring to break United States sanctions.

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The pair stand charged in a superseding indictment, which was made public today in the Southern District of New York, conspiring to violate United States sanctions against the Democratic People’s Republic of Korea (DPRK or North Korea). The two worked with a U.S. citizen, Virgil Griffith, to illegally provide cryptocurrencies and blockchain technology services to North Korea.

Over the previous several years, various nations have imposed political and economic penalties on North Korea. The Biden administration enacted its first weapons-related sanctions in mid-January 2022.

According to a statement released by the DoJ and Department of State, the Treasury Department announced the measures that followed six North Korean ballistic missile tests since September, each of which violated U.N. Security Council resolutions.

On 2 April 2022, the United States imposed new sanctions on five North Korean organizations involved in the country’s most recent missile tests. The penalties included the country’s first intercontinental ballistic missile (ICBM) flight in more than four years.

According to court records, Alejandro Cao De Benos, a Spanish citizen, and Christopher Emms, a British national, joined forces to organize the Pyongyang Blockchain and Cryptocurrency Conference (the DPRK Cryptocurrency Conference) for the benefit of North Korea.

Representatives from the DoJ said that Griffith traveled to North Korea via China in April 2019. After being denied permission to attend by the U.S. Department of State, Griffith subsequently gave a talk at the Pyongyang Blockchain and Cryptocurrency Conference. All this occurred even though the U.S. Department of State denied him entry.

Cao De Benos and Emms remain at large. Griffith pleaded guilty to conspiring to assist North Korea in evading economic sanctions in violation of the International Emergency Economic Powers Act (IEEPA). In April 2022, the DoJ sentenced him to 63 months in jail with a $100,000 fine. 

The United States will not allow the North Korean regime to use cryptocurrency to evade global sanctions designed to thwart its goals of nuclear proliferation and regional destabilization. This indictment, along with the successful prosecution of a co-conspirator, Virgil Griffith, makes clear that the department will hold anyone, wherever located, accountable for conspiring with North Korea to violate U.S. sanctions.

said Assistant Attorney General Matthew G. Olsen of the DoJ’s National Security Division.

DoJ takes a stricter stand on crypto use to evade sanctions

During the DPRK Cryptocurrency Conference, Emms and Griffith taught attendees how to use blockchain and cryptocurrency technology to launder money and skirt international sanctions. The North Korea’s authorities authorized the Emms and Griffith’s presentations at the DPRK Cryptocurrency Conference and customized them to fit the audience.

In his own sales pitch, Emms allegedly advised North Korean officials that cryptocurrency technology made it ‘possible to transfer money across any country regardless of what sanctions or any penalties governments impose on any country.’ The sanctions imposed against North Korea are critical in protecting the security interests of Americans, and we continue to aggressively enforce them with our law enforcement partners both here and abroad.

said U.S. Attorney Damian Williams for the Southern District of New York.

The DoJ and the FBI are leading the investigation, with significant assistance from the National Security Division’s Counterintelligence and Export Control Section, the DoJ’s Office of International Affairs, the Department of Commerce’s Office of Export Enforcement, and the Singapore Police Force.

A persistent misunderstanding appears to have taken hold among lawmakers: that cryptocurrencies, in general (and especially Bitcoin), endanger sanctions regimes and anti-money laundering efforts due to the anonymity they provide users.

The DoJ has been actively involved in digital currencies both domestically and internationally. For example, the U.S. Department of Justice (DoJ) made a historic record seizure of $4.5 billion worth of cryptocurrency in early February. The DoJ also announced the arrest of a New York pair for laundering funds stolen from a cryptocurrency exchange.

As the United States imposes economic sanctions to counter Russia’s aggression in Ukraine, cryptocurrencies have been suggested as a method for the Kremlin to avoid them. However, the belief that Bitcoin provides perfect anonymity is incorrect and overlooks the complex dynamics currently at play between cybercriminals, authorized parties, and law enforcement agencies.