Bits + Bips: Is Crypto Privateering Even Legal?

**Austin Campbell** (0:00)
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**Austin Campbell** (0:21)
So let's talk for a moment about some of the objections here because I think it's important to walk through these.
And I'm going to go through them kind of one at a time. So we'll start with Paul Rosenzweig, who's a former DHS Deputy Assistant Secretary. Exact quote, this is a bad idea. There are much better ways to revive what seems to me is essentially a governmental function. And then he says participation would quote, quite likely violate the international law prohibition on piracy. So back to law school, I'm going to start by saying, I know somebody is losing the argument any time that they cite international law because that is not a thing, right? Like anybody who wants to come to the United States and argue with us about military action on the basis of international law is staring down at this point, I don't know, close to 100 years of precedent where we're going to tell them, sure, you enforce that with your army, right? Like you remember the Key and Peel sketch where he was president doing that.
What are you going to do? Sanction me? Right? It is, or no, that's Dave Chappelle. I have just insulted everybody. Dave Chappelle punchline, though. Does the international law thing make any sense? Should this just be a government function?

**Chris Perkins** (1:40)
Well, let's start with the problem and how you're going to solve it. Do you want to, you know, call raise taxes even higher and allocate more of those taxes to do this function? The things you need to consider are talent and incentives. And it's just very, very, and scale. It's very expensive and very difficult to source talent in, you know, that would come in and provide that government service. Again, we've got some great people in the national security apparatus, you know, doing this day after day.
But it hasn't stopped the amount of crime. What was it? 20-something billion, Patrick Witt was saying on Twitter.
And yeah, 21 billion last year. We have a problem, the status quo isn't working. So we can either leverage the private sector and the efficiency speed and scale, or we can pray for the best, start a new agency.
And I think we all know how that ends. I can't think of too many examples where the government's done a better job at moving quickly and efficiently when we have a huge problem of this nature. So look, I know where my head is, but again, if you have a better solution, like surface it, because we have a problem, $21 billion. So, okay, where are you going to raise the fund? Are you going to go to the House of Representatives and get them to open up the purse? How much do you need? Where are you going to source the talent? You know, don't come with solutions because no one's coming in with solutions. This is the best thing we can think of.

**Austin Campbell** (3:15)
All right. So let's hit some of the others then. So two that I'm going to put together. Erica Lonergan from Columbia. Is this a slippery slope to enable private sector offensive cyber operations directly against nation state adversaries? And then Michael Garcia, whose former CISA policy, it comes down to attribution. And if you make a risky bet on who we're attributing attacks to, that's where things can get dicey. So to me, as we're looking at this one, and I'm going to lob this ball to you, Chris, I do agree if you misattribute, then you're going to have, call it potential nation state level consequences. But given the main actors we seem to be targeting are North Koreans or various, call it transnational criminal rings, who quite frankly are mostly on the outs with China too.
How big of a risk is this?

**Chris Perkins** (4:11)
Yeah, look, I think we made it clear that at this point, the government is saying, no, no, no, we don't want you to attack state, other governments or states that's off limits. We're going after the bad guys.
Here's the beauty of crypto. Everything is on chain. Everything is on chain. So the ability to trace, particularly in our sector, the ability to trace and to run advanced analytics to understand who's doing what, is pretty amazing. And so to the extent that there is on chain activity and somebody deviates off course and they do the wrong thing, well, they're going to be held accountable. Back in history, they actually had prize courts and they also had bonds. And if privateers went over the line and became pirates, guess what? They lost their bonds and they were held accountable.