Crypto neo-privateers could be the solution to hacks

Opinion by: Christopher Perkins and J. Christopher Giancarlo

Regarding cybersecurity in the crypto industry, 2025 is off to a terrible start. Lazarus Group, a North Korean-sponsored hacking organization, recently stole $1.4 billion from Bybit, a major crypto exchange. This was one of the largest hacks in the crypto industry’s history. In 2024 alone, hackers pillaged their way across the sector, stealing over $2 billion. Over half can be directly traced to Lazarus Group, which diverts stolen digital assets to various illicit activities. The status quo is unacceptable. 

Pariah states continue to equip, sponsor and resource hacking groups that maneuver against entrepreneurs and ravage the digital economy. Policies and government capabilities have fallen short. Entrepreneurs remain exposed, and every exploit has obvious national security implications. Today, these adversaries stand in the way of the Trump Administration’s stated goal of positioning the United States as the “crypto capital of the planet.”

To find the solution to this problem on the frontier of technology, America should look to its past. Though dormant for the last 200 years, the resurrection of letters of marque and reprisal, which commission “privateers” to seize property or assets belonging to specific foreign adversaries, would immediately close this gap in national security. Through financial incentives, a neo-privateer program would unleash the private sector’s talent, ingenuity and sophistication to hack the hackers — effectively turning the predators into prey. 

A brief history of privateering 

Privateering is a governmental authorization of private enterprises to engage in hostilities against the commerce of national enemies. It allows sovereigns to marshal unconventional resources and supplement military power at low cost. Privateering has a rich and colorful history in the United States. The legendary exploits of privateers like John Paul Jones, who later became the “Father of the American Navy,” helped turn the tide of the American Revolution. American privateering was born out of necessity. In an era when America did not have adequate public resources to confront the Royal Navy, patriotic private citizens, further incentivized through the prospect of financial gain, crippled the British commercial fleet. While letters of marque and reprisal authorized private citizens to seize property or assets belonging to specific foreign powers, they also required reporting of seizures, waived various piracy laws and allowed privateers to keep a portion of the spoils. Often, privateers had to post bonds to ensure their conduct complied with regulations.

Recent: Chainalysis reveals how Bybit hackers stole $1.4 billion in crypto

The United States has a firm legal basis for a modern-day privateer program. The Founding Fathers enshrined privateering in the Constitution, granting Congress the power “to declare war, grant letters of marque and reprisal, and make rules concerning captures on land and water.” James Madison granted 500 of these letters to private citizens during the War of 1812. While European nations effectively abolished privateering with the Declaration of Paris in 1856, the United States did not sign the treaty, preserving the option to use privateers in future conflict. 

Neo-privateers

A 21st-century privateer program would issue letters of marque and reprisal to American companies or individuals to hack wallets and retrieve funds controlled by OFAC-sanctioned governments, entities or individuals. Recipients would be immune from US prosecution for their activities directly related to executing this mission. For example, neo-privateers could transact directly with OFAC-sanctioned wallets and entities. Proceeds from the sale of the assets would be shared with the privateers based on pre-arranged contracts.

Letters of marque and reprisal would deliver a low-cost, flexible and effective option to address unconventional national security challenges. At a time when Elon Musk’s Department of Government Efficiency (DOGE) is seeking to reduce the role of government and optimize costs, spending incremental public funds to develop the specialized cryptographic skill sets needed by law enforcement or intelligence community teams is expensive. Talent acquisition and retention are other significant challenges. Perhaps for these reasons, government efforts to stop state-sponsored hackers have been largely ineffective. 

With the rise of artificial intelligence, the sophistication of hackers is set to increase exponentially. AI “agents” can more efficiently identify vulnerabilities in code. Low-cost, AI-generated deepfake video and audio capabilities perfect impersonation, allowing hackers to more easily swindle unwitting victims. Still, advanced AI tools and capabilities can work in both directions. Neo-privateers, indemnified and empowered by letters of marque and reprisal, could use the most sophisticated technologies to attack the attackers. By leveraging the private sector to fight back in the crypto space, government agencies could focus on higher-priority security concerns. 

With nearly 300 pro-crypto members, Congress must act immediately. Crypto champions like Senator Cynthia Lummis (R-WY) and Congressman Tom Emmer (R-MN) are well positioned to work across the aisle and partner with crypto czar David Sacks to prioritize a neo-privateer program that would restore security to the crypto industry. The crypto industry would celebrate.

The time has come for the United States to embrace its history and launch a neo-privateer program. Letters of marque and reprisal provide an elegant solution to protect American innovation and its national security.  

Opinion by: Christopher Perkins and J. Christopher Giancarlo.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.