Pirates vs. Privateers
Pirates and privateers played a major role in maritime history from the ancient world to the early modern era. And although their distinction has become blurred, they were not the same thing. Pirates were seafarers who attacked ships and coastal towns outside the bounds of law, seeking plunder and ransom.
Greek and Roman records describe raiders who preyed on merchant vessels, Vikings of the early Middle Ages terrorized Europe’s coasts, and during the 16th and 17th centuries, piracy flourished in the Caribbean, Mediterranean, and along trade routes to Asia.
In an effort to combat the pirates, governments turned to privateers. These were adventurous private ship owners who were granted official commissions, known as “letters of marque.” Unlike lawless pirates, privateers were considered extensions of a nation’s navy and were thus “legally” able to attack sanctioned targets. Privateers were authorized to do a variety of things, including defending merchant fleets from pirates, disrupting enemy commerce, and boarding and seizing enemy ships.
As an added bonus, rather than costing the government, they were actually a source of revenue for both the privateers themselves and their State sponsors. One of the most famous of all privateers is English admiral Francis Drake, who made a fortune plundering Spanish settlements in the Americas.
Crypto Pirates
Piracy has taken on a new form in the 21st century. Instead of ships raiding trade routes, crypto piracy is gaining popularity, i.e., seizing digital wealth through covert operations on the blockchain. Some of these crypto pirates are individuals or small groups, while others are “state-sponsored”.
Unlike independent hackers, state-backed groups operate with the resources and protection of governments. Their targets are cryptocurrency exchanges, decentralized finance (DeFi) platforms, and individuals holding significant digital assets. North Korea’s Lazarus Group is perhaps the most notorious example, linked to multi-billion dollar crypto heists, including the 2022 Axie Infinity breach. Governments accused of sponsoring such piracy see it as both a source of revenue and a way to undermine adversaries’ financial systems. Meanwhile, global regulators are struggling to build defenses against these state-aligned raiders of the digital seas.
Initially, Governments responded with stronger compliance frameworks, blockchain forensics, and international cooperation to trace illicit flows. Still, as digital assets continue to grow in scale and importance, state-sponsored crypto hacking remains a threat in the evolving landscape of cyber warfare.
Cue the Privateers
Taking a historical approach, US Representative David Schweikert has introduced legislation granting the President authority to act against crypto criminals operating abroad. He has introduced House Resolution (H.R. 4988), which invokes the old concept of “letters of marque and reprisal.”
Schweikert proposes to extend letters of marque into the digital domain. H.R. 4988 would allow private individuals or companies to act as “Privateers” on behalf of the United States to recover stolen assets or disrupt cybercriminal operations targeting US interests.
These private actors could be instructed to use “all means reasonably necessary” to seize assets or detain foreign actors, including those linked to state-sponsored cybercrime networks. The privateers would be required to post a security bond to enforce accountability and ensure compliance.
Schweikert said:
“Our current tools are failing to keep pace. This legislation allows us to effectively engage these criminals and bring accountability and restitution to the digital battlefield by leveraging the same constitutional mechanism that once helped secure our nation’s maritime interests.”
If HR 4988 becomes law, rather than relying on government intelligence-gathering to catch cybercriminals, we would implement a capitalism-based system of incentives to stop state-sponsored theft.
Considering this, Schweikert said:
“Americans deserve protection from digital predators who exploit outdated laws and hide in foreign jurisdictions. This proposal harnesses innovation and constitutional authority to respond to the modern crisis of cybercrime.”
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