Neo-Privateers: Fortifying Crypto’s Future
Cybersecurity in the cryptocurrency industry is facing a dire and escalating threat. The year 2025 has already brought devastating attacks, including a recent $1.4 billion theft from the Bybit crypto exchange by the Lazarus Group, a North Korean-backed hacking organization. This represents one of the largest heists in the history of the crypto sector, following a year where hackers pilfered over $2 billion.
This status quo is unacceptable, as hostile states continue to fund and equip hacking groups that target entrepreneurs and disrupt the digital economy. Current policies and government capabilities have proven insufficient, leaving entrepreneurs vulnerable and exposing significant national security vulnerabilities. These adversaries are actively hindering the United States’ goal of becoming the “crypto capital of the planet.”
To effectively confront this challenge, America should look to its past for a solution. A modern revival of letters of marque and reprisal, which empower “neo-privateers” to seize assets from specific foreign adversaries, could immediately address this critical security gap. This approach leverages financial incentives to unleash the private sector’s talent and ingenuity in hacking the hackers – turning the predators into prey.
A Brief History of Privateering
Privateering, historically, involved governmental authorization for private enterprises to engage in hostilities against the commerce of national enemies. It provided sovereigns with a low-cost method to augment military power by utilizing unconventional resources. The United States has a rich privateering history, with figures like John Paul Jones, later known as the “Father of the American Navy,” using privateers effectively to undermine the British during the American Revolution. Given limited public resources at the time, patriotic citizens were financially incentivized to cripple the British commercial fleet.
Letters of marque and reprisal authorized the seizure of assets belonging to specified foreign powers. Privateers were required to report seizures, were exempt from certain piracy laws, and were provided a portion of the spoils. To ensure adherence to regulations, privateers often had to post bonds.
A Firm Legal Foundation
The legal basis for a modern privateer program is firmly established. The U.S. Constitution grants Congress the power to “declare war, grant letters of marque and reprisal, and make rules concerning captures on land and water.” During the War of 1812 alone, James Madison issued 500 such letters. Although European nations largely abolished privateering through the Declaration of Paris in 1856, the United States did not sign the treaty, preserving the option for future conflicts.
Neo-Privateers in the 21st Century
A contemporary privateer program would grant letters of marque and reprisal to American companies and individuals. These “neo-privateers” would be authorized to hack wallets and recover funds controlled by sanctioned governments, entities, or individuals. They would be immune from U.S. prosecution for actions directly related to this mission, allowing them to transact with OFAC-sanctioned wallets and entities. Proceeds from asset sales would be shared based on pre-arranged contracts.
Letters of marque and reprisal offer a cost-effective, flexible, and efficient solution to address unconventional national security concerns. Public funds spent on cultivating cryptographic skill sets within law enforcement or intelligence teams can be expensive and face challenges in talent acquisition and retention. Government efforts have been largely ineffective at stopping state-sponsored hackers. The increasing sophistication of hackers, amplified by AI, presents further challenges, including the use of AI-generated “deepfake” technology for impersonation.
However, advanced AI capabilities offer an advantage to the defenders as well. Neo-privateers, indemnified and empowered by letters of marque and reprisal, can leverage the most sophisticated technologies to combat these attackers. This enables government agencies to focus on higher-priority security issues within the crypto space. Given the strong pro-crypto representation in Congress, action must be taken immediately. Crypto advocates like Senator Cynthia Lummis (R-WY) and Congressman Tom Emmer (R-MN) are well-positioned to work collaboratively and partner with crypto experts like David Sacks to prioritize a neo-privateer program.
This approach provides an elegant solution to safeguard American innovation and national security.
Opinion by: Christopher Perkins and J. Christopher Giancarlo
Disclaimer: This article provides general information purposes only and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
