Unchained - Bits + Bips: Is Crypto Privateering Even Legal?

Episode Date: August 19, 2026

📢 Bits + Bips has its own channel now — full episodes here: https://www.youtube.com/@Bitsandbips  Austin Campbell runs through the strongest legal objections to Trump’s privateering memo, from claims it violates international law on piracy to warnings that private hackers could be treated as non-uniformed combatants. The segment ends with a pointed question: if privateering is where critics draw the line, why did nobody blink at Iraq, Afghanistan, or Iran? Hosts: Austin Campbell - Host of Bits + Bips, Founder of Zero Knowledge Group, and Adjunct Professor at NYU Stern - https://x.com/austincampbell Chris Perkins - Co-host of Bits + Bips and Head of Franklin Crypto - https://x.com/perkinscr97 This clip is from a longer conversation on Trump's executive order deputizing private firms to hack foreign cybercriminals. Full episode here: https://youtu.be/FxQCMAJ9GBU?si=tVqmGwizLzv2BAk6  We go live every Monday - subscribe to catch it live. Sponsor 👉  Visit 1inch.com to swap tokenized securities, crypto and more. Simple. Secure. Self-custodial. Whatever asset you’re buying - swap it at 1inch.com Chapters: ⚖️ 00:20 Paul Rosenzweig's claim: privateering violates international law on piracy 💰 01:39 Chris on why no better solution exists: cost, talent, and scale 🎯 03:14 Erica Lonergan and Michael Garcia: the slippery slope and attribution risk 🌍 05:31 Does this go beyond crypto? The pig butchering scam question 🪖 07:21 Jake Williams: are American privateers non-uniformed combatants? 🏛️ 09:47 Isn't privateering a congressional power, not a presidential one? 🔥 12:05 Why Austin says critics need to propose a better solution first Learn more about your ad choices. Visit megaphone.fm/adchoices

You're listening to a brief segment from one of the Bits and Bips episodes this week. The full show is now only available on its own dedicated Bits and Bips channels. So be sure to go to X, YouTube, and your favorite podcast platform and search for Bits plus sign Bips, spelled BIPS, and subscribe. 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 as 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 you know somebody is losing the argument anytime 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 Peele sketch where he was president doing that. But 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? 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 that would come and provide that government service. Again, we've got some great people in the national security apparatus 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. 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 in this nature. So look, I know where my head is, but again, if you have a better solution, like surface it, really. 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, come with solutions because no one's coming into with solutions. This is the best thing we can think of. 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, who's 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 miss a tribute, then you're going to have, call it potential nation state level consequences, but given the main actors we seem to be targeting our 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?

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, right? And 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. It was pretty awesome to see the government adopting a similar sort of framework, you know, a million dollar bonds, you know, thereabout. And so like they're using the lessons of history for accountability. Again, this should not be a free for all to be successful.

It needs to be highly regulated and enforced. And as we've talked all along, as we've gone through all this clarity stuff, crypto is actually really good for national security because you find out where all the money's going. Let me actually follow up on that, though, with something like that caught my eye here. Is this limited purely to crypto? Because if you look at something like the pig butchering scam, that, and for those who are not familiar, let me lay this out on the table. the pig butchering scammers are a criminal syndicate with thousands of people working together

as a highly professional organization. You can think of it more like a corporation that does crime than three dudes in a basement. Like your conception of hackers as individual actors here is totally wrong. This is a fully funded enterprise. And they do a lot of different related criminal activities like romance scams, investment scams, hacking, sim swapping, money laundering, including for the Iranians, not just people in Southeast Asia. It is a very sophisticated group and it has a gravitational pull and they take in money from crypto, but they also take in money from the regular banking system and they take in cash. So my question to you is, is this only for people stealing from Americans through crypto or would it target all of those actors? It feels like this

This memorandum has extended the aperture a bit. That's my sense. And yeah, you're right. There's huge pig nurturing issues, particularly out of Southeast Asia. Really, really big issue. Look, I come at this problem from a crypto perspective. Are there issues in Web 2 as well? Absolutely.

Are the traditional banking networks involved in those issues 100%. I would imagine crypto is still a small part of it. But again, it's really holding up innovation in our space. this thing we call security. And we need to, we need to be better. All right. So next one, I am very curious to your opinion on this one. So Jake Williams, formerly of the NSA, Hunter strategy. Americans participating in these operations could easily be classified as non-uniformed combatants while traveling overseas, which maybe I'm curious as to your thoughts. You know, in the law of land warfare, yes, non-combatants who don't wear military uniforms and follow a whole bunch of rules, they're considered non-combatants and they're treated as criminals.

That's a fact. But I think the way that they thread the needle on this was they're saying we do not want, first off, there is no word declared that I'm aware of. Second off, we're, I think in this memorandum, we're saying, no, no, no, go out, you're not going after states. you're going after criminal activities. So I think they thread the needle on that based on my cursory look, you know, based on my very limited education on the law of land warfare. But it's a fascinating concept if you ever look at it. Like when you are in war, there's rules.

You have to wear a uniform. The officers are not supposed to be mandated to work. Like it's really interesting. But again, this is not, it seems to me this is not an offense. of activity against a state. So I don't think that would be a that would apply legally. But you never know what's going to happen. People get taken in by bad governments all the time. American citizens with, you know, this is an ongoing problem. So yeah, we'll see what happens. No, I, I agree. And I feel like the understated part of that is if that's true that the people on

the other side of this are also non-uniformed combatants, right? Like you would have to be saying, like, well, the hackers fall under the same treatment here because they're engaging in the same action. Well, that's right. And we're not treating them as combatants. We're treating them as criminals, which is the way that they should be treated. I mean, to me, it's a fascinating paradigm. If people want to start arguing to treat them as combatants, doesn't that open up our ability to just like, I don't know, drone strike crypto hackers, which is probably not what people were expecting. Yeah. So to extent somebody stole Bitcoin from somebody else in a hack, coin car hack or whatever, that's a criminal

activity and that's how they should be treated. Yeah. Yeah, to your point. Yeah. So the final point on this one, and I think this gets into a multi, multi-year history of like US, call it jurisprudence around war powers, is isn't privateering a congressional act? Like, why did this come through a presidential memo. And I'm going to be the first person to say I've been criticizing presidential use of war powers since like the early 2000. So I'm not so sure this is unusual. But what would you say? I'm not a constitutional scholar or lawyer. But I, you know, we do know Article 1, Section 8 enumerates the power of letters of Mark. I didn't see it say these are specifically letters of Mark. It looks like it's kind of something in between. And you're right. There,

there is this line between article one and article two you know when is the last time we declared war formally it's kind of in between um i think the lawyers are going to have to figure that one out but i was also really happy to see a version of this in clarity right so it's it's it's not like the executive is operating in a bubble now clarity hasn't been passed i hope it does but uh you know we'll see it happens to me to me on this final point i kind of look at that one and when i read it I'm going to be honest, I laughed to myself a little bit. I'm like, oh, so this is where you're drawing the line. You are okay with the Iraq and Afghanistan actions and you were okay with what's happening in

Iran, but privateering, no, no, no. Like, to me, either Congress needs to take the war powers seriously and take back a lot of powers from the president and then react appropriately. Or this is probably an appropriate thing for the president to do if you think everything else that was going on was appropriate. This is a little bit like saying it's okay. for them to, like, steal cars and murder people and blow up buildings, but no jaywalking, right? Like the scale of these offenses is just such that if this is where you're drawing the line,

I have so many questions about the, call it legal and moral framework upon which we're assigning war powers in the U.S. And this, again, this is somebody who's been somewhat skeptical. But if Congress wants to start doing their job, I would suggest they have much bigger fish to fry first. So on that note, as Chris and I predicted, before we even got on the stream, we were going to jam on privateering for a lot. So let me close it out with this comment. The pig butchering scammers and people stealing money here have destroyed lives. There are like folks who have committed suicide, businesses that have been destroyed. This is a real problem. So if you're a critic of this, I actually think Chris has said something very important, which is propose your

solution because do nothing is demonstrably a very bad outcome for the world right now. And so if you don't think this is the right way to do it, what do you think the right thing to do is? Because it's easy to be like, well, we shouldn't do that. But the base state here is very terrible. We don't get to live in a theoretical world with none of this. So what is your solution? I want to stand by Chris on that point. If you like this segment, please like, subscribe, and tune in every Monday at 4.30 p.m. Eastern time. I'm Austin Campbell, the host of Bips and Bips, along with my friends Rahm Alawalia and Chris Perkins and our slate of exceptional guests. Every week, we're going to discuss macro, crypto, crypto, and the collision of worlds, covering topics that move markets and shape the financial landscape.

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