TL;DR: Ethereum Foundation “Special Projects” developer, and once a close associate of co-founder Vitalik Buterin, Virgil Griffith has reportedly been denied bail by a judge in the Southern District of New York, citing text messages to his parents renouncing citizenship at one point. Griffith was arrested last month on charges of violating US sanctions against North Korea. He traveled to the Hermit Kingdom and lectured about cryptocurrency and, allegedly, how to evade US sanctions through money laundering.

Ethereum Foundation Dev Denied Bail Based on Texts to Parents

“The US Attorney’s Office cited his text messages to his parents about renouncing his U.S. citizenship and setting up a money laundering business in North Korea,” Southern District of New York court watcher Matthew Russell Lee of Inner City Press reported. The dogged chronicler was among the only media present at a denied bail appeal hearing to determine if Griffith should be free while the case against him moves forward.

The live-tweeting provided insights into both the hearing and severity of charges levied by the US government. It’s also a look at just how skeptical legal authorities are about the world of cryptocurrency. “US Attorney says Griffith in text message claimed to maintain the world’s largest portal to the Dark Web. Mag Judge Moses asks if gov’t thinks North Korea will send a private plane to pick him up,” is just one juicy tidbit for those following Griffith’s plight.

Prosecutors are seeking nearly two years of prison time for the former Ethereum Foundation developer, and they believe he is a real risk to flee. “Griffith’s lawyer says there is nothing illegal about using crypto currency. Offers to compile for court a list of his accounts, including it seems $65,000 in ‘old fashioned saving account,'” Lee documented. Judge Moses seemed unpersuaded. “‏Judge Moses: he didn’t just invest in crypto currency, he designs crypto currencies. Defense lawyer: it’s a developing market. It shouldn’t harm him under Bail Reform Act.”

He May Have Mislead Pre-Trial Services

The hearing was in response to a previous judge’s decision to keep Griffith detained during the duration due to renouncing his US citizenship in a text message to parents. The defense attorney believes the judge in that hearing “did not have all the facts when she ordered Griffith detained,” and asked Moses to overturn the decision. “Defense lawyer says Griffith would live in Alabama with his parents (who are here in court). Inner City Press has seen them waiting here since morning, through the other case it has reported on,” Lee revealed.

Griffith’s lawyers also argued he was in contact with prosecutors (Assitant US Attorneys or AUSAs), and mentioned he has a residence in Puerto Rico which could be another place he resides during the process. “AUSA: We were not informed there would be any more cooperation… We were unable to locate him. He has not given sufficient financial info. He may have misled Pre Trial Services: he owns property, and a shell company in Puerto Rico,” Lee noted of the back-and-forth. “AUSA: Griffith told his parents he might set up a money laundering company in North Korea.” The government also believes Griffith “can acquire property overseas with his digital wallet.”

Prosecutors maintained all along how they warned Griffith not to travel to North Korea, citing US law and sanctions. They appear to view the once celebrated developer as a rogue crypto enthusiast. Supporters insist Griffith is ideological in the best sense, a true believer in the power of spreading knowledge, and in no way looked to assist the North Korean government. “Judge Moses: there are no conditions to assure defendant’s presence. Bail is denied,” Lee relayed. “Judge Moses: Defendant had a month to provide transparency into his accounts. I am somewhat troubled by delay in disclosing Puerto Rico residence. His private communications to his parents about renouncing citizenship and [setting] up money laundering in hostile NK.”

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