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US Government labels Virgil Griffith’s argument to dismiss sanctions charges ‘absurd’

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Lawyers representing the United States government have filed a legal memo opposing the dismissal of charges for Virgil Griffith, a former Ethereum Foundation researcher accused of conspiring to violate U.S. sanctions against the Democratic People’s Republic of Korea, or DPRK.

According to court records filed Nov. 19 in the Southern District of New York, prosecutors’ referred to Griffith’s Oct. 22 argument to dismiss the charges against him as “unavailing.” The legal team is alleging the former Ethereum Foundation researcher provided a service to the DPRK by using an analogy of a U.S. citizen providing nuclear secrets to scientists in the reclusive nation:

“A simple hypothetical lays bare the absurdity of Griffith’s position. By Griffith’s logic, the [North Korea Sanctions Regulations] would permit an American physicist to travel to the DPRK and explain the science behind nuclear weapons to a conference of North Korean physicists, so long as the science could be found on the Internet, he received no fee, and the regime’s desire to build nuclear weapons was not economic in nature.”

The U.S. district court indicted Griffith in January on charges of conspiracy to violate the International Emergency Economic Powers Act following a presentation he made at a North Korean conference in April. The speech allegedly contained information North Korean agents could use to circumvent economic sanctions with cryptocurrency and blockchain technology.

Federal authorities are alleging Griffith knew that the DPRK was specifically interested in methods to get around sanctions using blockchain. They claim Griffith texted an associate, stating he was planning to facilitate the transaction of 1 Ether (ETH) “between North and South Korea,” knowing that it would violate sanctions.

Griffith has argued that his presentation was a “highly general speech based on publicly available information,” that he received no fee for his participation, and the speech had no “economic utility.” Therefore, he claims the charges are without merit and the speech protected under the First Amendment.

However, the legal memo states Griffith admitted he “introduced concepts” on crypto and blockchain to the conference attendees in his interviews with the Federal Bureau of Investigations last May and November, and some North Koreans likely left with a better understanding of how to use the technology to circumvent sanctions.

The case against Griffith is ongoing. He has pleaded not guilty to the charges and is currently free on a $1 million bond.



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London Stock Exchange-listed firm inks FCA’s approval for crypto services

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Mode Global Holdings, a London Stock Exchange-listed fintech group, has secured major regulatory approvals for cryptocurrency and fintech operations in the United Kingdom.

The company announced Thursday that Mode has secured its Electronic Money Institution license and AMLD5 registration from the U.K. Financial Conduct Authority.

The AMLD5 registration has been granted to Mode’s crypto arm Fibermode Limited, establishing it as an official crypto asset firm in the United Kingdom, pursuant to the amended regulations on money laundering, terrorist financing and transfer of funds.

The AMLD5 registration is a requirement for crypto-related businesses in the country that fall within the scope of money laundering regulations. According to the announcement, Mode is the fifth company to have received this registration to date since the FCA became the official AML supervisor of the crypto industry in the U.K. in January 2020.

Alongside the AMLD5, Mode’s subsidiary Greyfoxx Limited also acquired the EMI license, which enables Mode to offer a “range of innovative financial services” to both businesses and consumers in the United Kingdom, the announcement notes.

Following the acquisition of new regulatory approvals, Mode is planning to further expand its crypto services, including decommissioning its investment product known as the “Bitcoin Jar.” The product aims to allow Mode customers to use Bitcoin (BTC) to generate BTC interest rather than simply holding it in a wallet or on an exchange.

Mode CEO Ryan Moore noted that the new regulatory developments provide a major step in Mode’s mission to deliver a trusted and regulated environment. “It means we now have the ability to scale our operations and continue delivering innovative payments products for our customers under our own EMI licence. Both the EMI licence and the AMLD5 registration ensure business transparency, strong oversight and give our customers confidence in our offering,” he said.

Related: UK regulator warns against 111 unregistered crypto companies… and FOMO

The latest news comes shortly after a member of the British Parliament pointed out major difficulties in the process of registering crypto firms under the FCA’s AML regulations in late May. Economic secretary John Glen elaborated that FCA was not able to process and register all applications by its previous deadline due to a significant number of firms failing to adopt robust AML control frameworks as well as employ proper staff.