Crypto Privateers: Trump Insiders and Hill Power Brokers Eye New Scheme
A long-forgotten clause of the Constitution could help the US build its Bitcoin reserves, tax-free.
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Leave No Crypto Behind
Imagine you’re a commander in the Revolutionary War. You don’t have the money or the time to build large ships or train people to sail them, but vessels belonging to the Royal Navy — at that time the largest and most experienced navy in the world — are rapidly approaching shore. The ships bring British soldiers to kill you, and keep your allies from France, Spain, and the Netherlands away.
Would you waive a white flag of surrender? Would you run for the hills?
No. You’d look around, assess your resources, and marshal a response.
That’s exactly what the Continental Army did when it asked merchant vessels to fight on its behalf. As part of a policy of privateering during the American Revolution, almost 800 merchant ships were commissioned by the Continental forces responsible for taking out approximately 600 British vessels. In 1788, the founding fathers enshrined it in the Constitution as “Letters of Marque and Reprisal.”
Historically, these “Letters” have been used to transmute piracy into authorized naval activity. But for a couple of crypto industry leaders, CoinFund President Chris Perkins and former CFTC Chair Chris Giancarlo, they might have use in the 21st century. According to Perkins and Giancarlo, now is the time to use this long-forgotten Constitutional clause for something our founding fathers could have never foreseen: retrieving stolen crypto from foreign hacking groups.
In recent months, Giancarlo says he has briefed several Members of Congress, at least two members of Trump’s cabinet, and the White House crypto team on the idea. And although it is still considered a fringe idea amongst crypto’s political lobby, it’s gaining momentum amongst senior politicians and agency staffers who have Trump’s ear. They see the proposal as another path for the administration to embrace crypto and, perhaps more importantly, fund the national Bitcoin reserve.
“This is an idea that Donald Trump would naturally like,” explained Giancarlo. “It has a lot of drama to it.”
Here is How It Works
Article 1, Section 8, Clause 11 reads, “The Congress shall have Power To…declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water.” (emphasis added).
Letters of Marque and Reprisal were a common instrument used by European governments between the Middle Ages and mid-1800s to bolster maritime forces. The government would issue the documents themselves, which entitled privateers to a portion of the bounty recovered, while outlining basic guidelines, including restrictions on brutality, processes for appraising the goods seized from enemy ships, and details as to the extent of protection a ship would receive.
“The Letter of Marque made you a lawful warrior,” explained Eli Lehrer, President of the libertarian think tank the R Street Institute. “You weren’t a pirate anymore.”
In the US, granting Letters is a constitutional power of Congress — but Congress has historically delegated much of this authority to the executive branch through legislation. In the War of 1812, for example, Congress authorized that Letters be used, but the Secretary of State addressed the individual notices to private vessels.
That was until the Letters fell out of popularity in the mid-19th century. The 1856 Paris Declaration banned the practice internationally, and while the United States was not a signatory, its zeal for the Letters also diminished after.1
Since the 19th century, though, there have been occasional calls to revive Letters of Marque. In 2009, for example, Ron Paul proposed using the form to combat Somali Pirates, and this February Tennessee Republican Representative Tim Burchett and Indiana Republican Representative Mark Messmer introduced a bill proposing to use the Letters against drug cartels.
According to Lehrer, these contemporary proposals raise “novel questions,” because they moved the medium out of its traditional nautical context and didn’t arise in connection with a Congressionally-declared war. And since neither of these efforts became law, the exact legality of the strategy remain untested.
Reinventing Letters for the Internet Age
Enter Perkins and Giancarlo. They aren’t concerned with historical practices so much as developing novel approaches to the challenges of modern times. Back in February, the two published an editorial in crypto news site Cointelegraph laying out “neo-privateering” as a strategy to “unleash the private sector’s talent, ingenuity, and sophistication to hack the hackers — effectively turning the predators into prey.”
At the time, not long after the cryptocurrency exchange ByBit was hacked and drained of over a billion dollars of assets, the obvious target of the program was the highly-skilled North Korean hacking group Lazarus.
For Perkins and Giancarlo, it still is. “The North Koreans stole $2.4 billion dollars in the past two years. If stablecoins are going to grow to $3 trillion, we better address the security situation quickly,” Perkins said.
After the Cointelegraph article, Giancarlo continued to advocate for the idea by pitching it at the March 7 White House Crypto Summit. Participants advocated for their policy priorities, and Giancarlo chose the Letters of Marque. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, Crypto Czar David Sacks, Executive Director for the White House Crypto Council Bo Hines, and Majority Whip Tom Emmer were in attendance.
Bessent and Lutnick were interested, according to Giancarlo. Just the night before, Executive Order 14233 tasked them with developing “budget-neutral strategies for acquiring additional bitcoin,” and Letters of Marque could be a way to do that.
“The United States is even stronger [than North Korea] in our private sector, and if we unleash that, we could find their vulnerabilities and get back our crypto, and some of that could go to fund the United States Crypto Reserve,” Giancarlo explained.
Perkins, himself a Marine veteran, has proselytized the Letters of Marque strategy to members of Congress on both sides of the aisle. I was with him when he pitched the idea to New York Democratic Representative Ritchie Torres at a Solana Policy Institute political fundraiser in May. At the time, Torres signaled interest. (Torres’ office did not respond to a request for comment).
“The idea is very much alive,” said Giancarlo.
The Politics of Privateering
Granting Letters of Marque is different from the military working with a private contractor in two main ways. For one, it saves taxpayer expense. Rather than paying contractors like Blackwater to do the government's dirty work, privateers are paid from the bounty they collect, as adjudicated by a prize court (in this case, a federal district court).
Once granted their Letters, the deputized privateers retain some autonomy in deciding how to pursue their bounty. Theoretically, Congress could provide guidelines, but there is no requirement to do so and advocates for Letters point out that discretion allows companies with specialized expertise to exercise practiced efficiency. “This is a latency game,” Perkins explained. “Due process takes time, and what hackers do is they move very fast and get out of dodge. So it’s all about latency, and that’s where the privateers come in.”
That’s probably why, beyond the basic framework, neither Perkins nor Giancarlo are prescriptive as to how the Letters should be used. They don’t see themselves as lobbying, but rather, fighting for the good of the country. “This is so important for the future of our industry, and so important to solve this really hard security problem, that we have to bring this to our policymaker’s attention,” Perkins says.
The Trump Factor
The Letters of Marque’s flexibility may also make them particularly appealing to Trump himself. The president says he favors the speed and efficiency of private companies for many of the responsibilities the government currently manages. He also says (emphasis on “says”) that he likes keeping US troops out of foreign wars — so perhaps issuing privateers take the place of some of them could be an appealing option.
Privateering may just be the way of the world now. The Russian government encourages private software engineers to hack foreign entities on its behalf. China engages in privateering, too. Of course, these are not countries Americans usually look to as examples — but if the other global superpowers are using privateers to give them an edge in the lawless, distributed, and technically complex world of cyberwarfare, maybe we should, too. Competing with these countries on tech was, after all, core to Trump’s campaign.
Further, there is a human element at play. On January 29th last year, Mike Gill, Giancarlo’s former chief of staff at the CFTC, was shot and killed during a reported carjacking. Gill had long been an advocate for the Letters of Marque strategy for fighting cyber crime. Giancarlo now sees his crusade as honoring his memory. “One of the things I’ve been talking to Congressional staffers about is if this were to gain traction that maybe there should be some mention of Mike Gill — maybe the ‘Mike Gill Bill,’ or something like that,” Giancarlo said. “If this moves forward, I’m hoping that Mike Gill gets some of the credit for it.”
Perkins and Giancarlo argue the proposal has bipartisan appeal: it’s bold enough for Trump, pro-crypto enough for the industry, and practical enough for lawmakers on either side of the aisle.
Even third parties see the incentives aligned. “This is the closest business model to traditional Letters of Marque we’ve seen in modern times,” says Lehrer. He’s not wrong.
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there was an incident — what Lehrer calls “a publicity stunt” — where the Navy commissioned a Goodyear Blimp to fight on its behalf in World War II, but it was not technically granted Letters of Marque as described in the Constitution. Privateering was also used in the Confederacy for the balance of the Civil War, but we all know how that turned out.