On Tuesday, the White House signed a memorandum that rewrites the rules of digital warfare—and it has nothing to do with state-sponsored APTs. The document, as reported by a single blockchain media outlet without a direct link to the original text, authorizes "vetted" private companies to conduct offensive cyber operations against foreign criminal networks, while explicitly stating that those companies bear all legal risks themselves.
The headline is deceptively simple: the government lets private firms hack cybercriminals. But the subtext is a tectonic shift in how state power is projected in the digital domain. For those of us who track cross-border payment flows—especially the flows of ransomware ransoms through cryptocurrency—this is not just a policy change. It is the formalization of a cyber privateer system, a digital echo of the 17th-century letters of marque that turned private ships into state-sanctioned raiders.
We map the flows, but the ocean remains unmapped. The memorandum’s vague language—‘foreign criminal networks’—creates a vast, unlit sea where the line between legitimate cyber operation and extralegal aggression dissolves. The implications for the crypto ecosystem, which already serves as the primary settlement layer for ransomware, are profound. Between the wire and the wallet, there is a void. And this policy just filled that void with a privateer’s flag.
Context: The Memorandum and Its Gaps
The memorandum, reportedly signed on a Tuesday in late April 2026, authorizes US-based companies that have passed an unspecified vetting process to conduct "offensive cyber operations" against foreign criminal networks. The key phrase is "at their own legal risk." The government provides the authorization but explicitly refuses to assume liability for any consequences—whether they be collateral damage, violations of foreign laws, or retaliation from the targeted entities.
This is not a formal change to the Computer Fraud and Abuse Act (CFAA) or the Patriot Act. It is an executive-level directive that, if authentic, creates a new category of permissible action for private actors. The vetting process remains opaque: no details on how companies are selected, what offensive tools they may use, or how targets are validated. The memorandum itself is unverified; the reporting lacks an official White House link, direct quotes, or independent corroboration. Yet even as a leaked or speculative document, the policy it describes is coherent enough to analyse as a strategic signal.
For the crypto industry, the context is critical. Ransomware groups—LockBit, BlackCat/ALPHV, REvil, and others—have long relied on cryptocurrency for ransom payments, primarily Bitcoin, Monero, and USDT on Tron. The US Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned cryptocurrency addresses associated with these groups, but enforcement has been reactive. The memorandum shifts the paradigm: instead of freezing assets, private companies are now authorized to actively disrupt the infrastructure that processes those payments—mixing services, unhosted wallets, C2 servers, and even the blockchain nodes themselves.
Core: The Crypto Infrastructure Under Fire
Let me ground this with something I saw firsthand during my years auditing cross-border payment flows. In 2022, I analysed 12,000 remittance transactions for a fintech project in Lagos, tracking how stablecoins reduced settlement times from five days to 15 minutes. But the same infrastructure that serves legitimate remittances also serves ransomware. The memorandum does not distinguish between the two. If a private company decides to take down a server that hosts a Bitcoin mixing service used by a ransomware group, that server may also process funds from Nigerian freelancers, Venezuelan pensioners, or Ukrainian refugees.
The core insight is this: the memorandum authorizes private companies to attack the cryptographic infrastructure that underpins the entire crypto ecosystem. When a company "hacks" a criminal network, it will likely target:
- Cryptocurrency wallets and exchanges: even if they are decentralized or non-custodial, the attack could freeze or drain funds that belong to both criminals and legitimate users.
- Mixing services and privacy protocols: Tornado Cash, Wasabi Wallet, and similar tools are already under regulatory scrutiny. Private companies could now launch active operations against them, effectively performing a form of digital asset seizure without judicial oversight.
- Blockchain nodes and relayers: attacking the infrastructure that validates transactions could cause chain-wide disruptions, especially for smaller networks like Monero or Zcash.
The legal risk for these companies is enormous. If they damage a legitimate user’s wallet, they face civil suits. If they violate the laws of a third country where the server is located, they face criminal prosecution. Yet the memorandum offers no insurance, no diplomatic protection, and no indemnification. This is a "bare-bones authorization" in the purest sense—a license to fight, but not to survive the consequences.
The Macro Watcher’s Lens: A New Asset Class for Private Military Contractors
From a macroeconomic perspective, the memorandum is a direct stimulus for the cybersecurity industry. But unlike traditional defense contracts, this is not a no-bid, cost-plus arrangement. The government is not paying for the operations; it is merely granting permission. The companies must fund their own R&D, hire staff, build offensive tools, and assume all legal costs. This transforms the cybersecurity industry from a defensive insurance model into an offensive services model.
I have seen this pattern before. In 2020, during DeFi Summer, I analyzed liquidity pools for a fintech startup and documented how algorithmic stablecoins redistributed wealth from retail to whales. The underlying mechanism was the same: a permissionless system that appears neutral but amplifies existing power asymmetries. Here, the government creates a permissioned system for offensive cyber operations, but the asymmetry is even starker. Only well-capitalized firms with existing offensive capabilities—CrowdStrike, Palo Alto Networks, Mandiant, SentinelOne—can credibly participate. They become the new privateers, wielding state-grade cyber weapons under a vague mandate.
DeFi promised freedom; it delivered a mirror. The memorandum reflects the same structural tension: the promise of decentralized action (private companies defending the internet) versus the reality of centralized control (only vetted, approved firms get to decide who is a criminal). The mirror shows us that "freedom" in cyberspace is always bounded by the interests of those who hold the most powerful tools.
Contrarian Angle: The Decoupling Thesis and the Crypto Fork
Most analysts will interpret this memorandum as a net positive for the crypto industry—after all, targeting ransomware groups should reduce the criminal use of cryptocurrency, improving its reputation. But I see a different, more dangerous trajectory: the decoupling of the crypto ecosystem into two parallel universes.
One universe is the "regulated" crypto sphere: stablecoins, permissioned DeFi, and exchanges that comply with OFAC sanctions and KYC/AML rules. The other is the "unregulated" or "privacy-focused" sphere: Monero, Zcash, decentralized mixers, and darknet markets. The memorandum, by authorizing private companies to attack the infrastructure of the latter, will accelerate the bifurcation. Companies that operate in the regulated sphere will actively assist in the disruption of the unregulated sphere, either by direct action or by providing intelligence to the government. This is not a war on crime; it is a war on ungovernable financial networks.
I see the pattern before it becomes a trend. The memorandum, if implemented, will create a powerful incentive for private companies to "prove" their effectiveness by targeting high-profile crypto targets that are not clearly criminal. For example, a company might attack a Monero mining pool that processes transactions from a ransomware group, but in doing so, it also disrupts the legitimate privacy transactions of activists, journalists, and ordinary users in authoritarian regimes. The collateral damage becomes a feature, not a bug—it sends a signal that privacy-preserving crypto is not safe.
The Strategic Dilemma for the Crypto Industry
Let’s consider the strategic dilemma. The memorandum is a "cyber privateer license," but privateers historically operated under a clear legal framework: they were agents of the state, entitled to prize money and protected by the state’s sovereignty. Here, the state explicitly disclaims responsibility. This creates a perverse incentive: companies may engage in high-risk, high-reward operations that generate significant profits (e.g., seizing illicit funds) while externalizing the costs (legal liability, diplomatic fallout) onto their shareholders and executives.
During my time auditing smart contracts, I learned that transparency in code builds trust, but only when paired with ethical discretion. The memorandum lacks any ethical discretion. There is no requirement for proportional response, no oversight mechanism, no post-operation review. The companies are essentially judge, jury, and executioner—and they are doing it for profit. This is a recipe for mission creep. First, they target ransomware groups. Then, they target "criminal networks" that include state-sponsored APTs. Then, they target any entity that the government deems a threat, with the company interpreting the mandate as broadly as possible to maximize revenue.
Takeaway: Positioning for the Next Cycle
As a macro watcher, I see the memorandum as a turning point in the relationship between state power and digital networks. The crypto industry has two paths forward. One is to embrace the regulatory bifurcation, align with the state-authorized privateers, and accept that privacy and decentralization will be sacrificed for legitimacy. The other is to build infrastructure that is resilient to this kind of targeted attack—decentralized nodes that are harder to take down, privacy protocols that can withstand active disruption, and legal frameworks that protect users from collateral damage.
The question is not whether the privateers will succeed. It is whether the ocean they sail will remain navigable for those who refuse to fly their flag. Between the wire and the wallet, there is a void. And the White House just filled it with a privateer’s charter. The next cycle will be defined by who can navigate that void without being consumed by it.
