Bits + Bips: Is Crypto Privateering Even Legal?
Bits + Bips: Is Crypto Privateering Even Legal?
2 hours agoUnchainedLaura Shin
Podcast14 min
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Note: AI-generated summary based on third-party content. Not financial advice. Read more.
Quick Insights

Decentralized finance investors should consider exploring 1inch (1INCH) following the launch of 1inch Aqua, a shared liquidity platform designed to maximize yields by backing multiple trading pairs from a single wallet balance. This platform directly targets roughly $540 million in idle DeFi capital, allowing liquidity providers to boost returns without locking assets across fragmented pools. Investors seeking broader thematic growth should look toward the blockchain security & on-chain analytics sector, which is positioned for sustained demand as the industry works to counter an estimated $21 billion lost to annual crypto fraud. Finally, Bitcoin (BTC) holders should immediately prioritize strict self-custody and robust wallet hygiene to safeguard their holdings against sophisticated cybercrime threats.

Detailed Analysis

1inch Aqua (1INCH)

  • 1inch has launched 1inch Aqua, a shared liquidity platform created to address capital inefficiency across decentralized finance (DeFi).
  • Research from Dune commissioned by 1inch revealed that approximately $540 million in concentrated liquidity sat idle during an average week in the first half of the year, accounting for roughly 30% of total DeFi Total Value Locked (TVL).
  • 1inch Aqua allows Liquidity Providers (LPs) to support multiple trading positions using a single token balance, keeping assets in their own wallets until a trade executes rather than dividing capital across separate pools.
  • Risk factor: As explicitly noted, providing liquidity carries inherent risk and trading fees are not guaranteed.

Takeaways

  • Liquidity providers and DeFi participants can monitor platforms like 1inch Aqua to improve capital efficiency and yield potential across multiple trading pairs without fragmenting their portfolio balances.

Blockchain Security & On-Chain Analytics (Sector Theme)

  • Cybercrime and organized fraud schemes, such as transnational "pig butchering" operations, accounted for an estimated $21 billion in losses last year, presenting a primary obstacle to innovation and adoption in the crypto ecosystem.
  • The public and transparent nature of blockchain technology enables advanced on-chain tracing and analytics, allowing investigators to track where stolen capital moves across networks.
  • Emerging policy discussions and proposals (such as concepts in the proposed Clarity legislation and executive memorandums) explore private-sector involvement in offensive cyber recovery, drawing on historical privateering models with high-value security bonds (e.g., million-dollar bonds) to maintain regulatory accountability.
  • Risk factors: Misattribution of cyberattacks poses significant geopolitical risks, and legal ambiguity persists regarding international law, war powers, and how independent cyber operators are classified abroad.

Takeaways

  • Investor confidence in Web3 relies heavily on solving security vulnerabilities; as illicit activity continues to scale, demand is likely to grow for on-chain analytics, compliance tools, and institutional blockchain security infrastructure.

Bitcoin (BTC)

  • Bitcoin was referenced as a primary target of crypto hacks and criminal theft.
  • The speakers highlighted that while Bitcoin thefts are serious criminal offenses, the transparent ledger structure allows stolen funds to be monitored on-chain as law enforcement and private security frameworks evolve.

Takeaways

  • Self-custody security, wallet hygiene, and counterparty risk management remain essential considerations for holding Bitcoin, given the scale of sophisticated hacking syndicates active in the space.
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Episode Description
📢 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
About Unchained
Unchained

Unchained

By Laura Shin

Crypto assets and blockchain technology are about to transform every trust-based interaction of our lives, from financial services to identity to the Internet of Things. In this podcast, host Laura Shin, an independent journalist covering all things crypto, talks with industry pioneers about how crypto assets and blockchains will change the way we earn, spend and invest our money. Tune in to find out how Web 3.0, the decentralized web, will revolutionize our world. Disclosure: I'm a nocoiner.