Reviving Privateering: A Neo-Privateer Program to Combat Crypto Hacks

The crypto industry has faced a series of high-profile hacks in recent years, with North Korean-sponsored hacking groups like Lazarus Group leading the charge. In 2024 alone, hackers stole over $2 billion from various crypto exchanges and platforms, with Lazarus Group responsible for more than half of these attacks. The status quo is unacceptable, and the current policies and government capabilities have fallen short in addressing this growing threat.

To tackle this issue, some experts have proposed reviving the concept of privateering, which involves commissioning private enterprises to engage in hostilities against the commerce of national enemies. This approach, known as a neo-privateer program, would incentivize the private sector to use its talent, ingenuity, and sophistication to hack the hackers and retrieve stolen digital assets.

Privateering has a rich history in the United States, dating back to the American Revolution. Legendary privateers like John Paul Jones played a crucial role in turning the tide of the war by crippling the British commercial fleet. 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.

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. Proceeds from the sale of the assets would be shared with the privateers based on pre-arranged contracts.

This approach offers a low-cost, flexible, and effective option to address unconventional national security challenges. 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 in Congress, the time has come for the United States to embrace its history and launch a neo-privateer program to restore security to the crypto industry.