Death of a data haven: cypherpunks, WikiLeaks, and the world's smallest nation

[Eugen Leitl]

http://arstechnica.com/tech-policy/news/2012/03/sealand-and-havenco.ars/1

Death of a data haven: cypherpunks, WikiLeaks, and the world's smallest
nation

By James Grimmelmann | Published March 27, 2012 8:00 PM

Sealand in all its rusty splendor

A few weeks ago, Fox News breathlessly reported that the embattled WikiLeaks
operation was looking to start a new life under on the sea. WikiLeaks, the
article speculated, might try to escape its legal troubles by putting its
servers on Sealand, a World War II anti-aircraft platform seven miles off the
English coast in the North Sea, a place that calls itself an independent
nation. It sounds perfect for WikiLeaks: a friendly, legally unassailable
host with an anything-goes attitude.

But readers with a memory of the early 2000s might be wondering, "Didn't
someone already try this? How did that work out?" Good questions. From 2000
to 2008, a company called HavenCo did indeed offer no-questions-asked
colocation on Sealandband it didn't end well.

HavenCo's failureband make no mistake about it, HavenCo did failbshows how
hard it is to get out from under government's thumb. HavenCo built it, but no
one came. For a host of reasons, ranging from its physical vulnerability to
the fact that The Man doesn't care where you store your data if he can get
his hands on you, Sealand was never able to offer the kind of immunity from
law that digital rebels sought. And, paradoxically, by seeking to avoid
government, HavenCo made itself exquisitely vulnerable to one government in
particular: Sealand's. It found that out the hard way in 2003 when Sealand
"nationalized" the company.

For the last two years, I've researched the history of Sealand and HavenCo. I
used the Wayback Machine to reconstruct long-since-vanished webpages. I dug
through microfilm of newspapers back to the 1960s. I pored over thousands of
pages of documents, only recently unsealed, from the United Kingdom's
National Archives.

My findings have just been published in a new 80-page article in the
University of Illinois Law Review, one called "Sealand, HavenCo, and the Rule
of Law" (PDF). It tells the fullband very weirdbstory of how this micronation
happened to be in the right place (the North Sea) at the right time (the late
1990s) to provide some cypherpunk entrepreneurs with the most impractical
data center ever built. Here, I'll give the condensed version of the tale,
hitting the important points in HavenCo's history and explaining what went
wrong.  Cryptographers in paradise

The story starts on the Caribbean island of Anguilla, at the 1998 Financial
Cryptography conference. The conference, dedicated to building secure online
payment systems, drew hackers who believed in better living through crypto.
One of them was an expatriate American, Sean Hastings, a cynical but cheerful
libertarian with a healthy suspicion of any and all forms of authority. (His
website sports the chipper slogan "Keep Calm and Carry" and features his PDF
book God Wants You Dead.) The freedom-minded Hastings had moved to Anguilla
to work on online gambling projects and explore the idea of starting a data
haven.

A Sealand/HavenCo timeline

1942: Roughs Tower constructed off the coast of East Anglia.

1948: Roughs Tower abandoned by English government following World War II.

1966: Pirate radio entrepreneur Roy Bates occupies Roughs Tower.

1967: Bates declares an independent Principality of Sealand.

1968: Bates acquitted of British firearms charges, causing Britain to adopt
policy of leaving him alone.

1978: German-led coup takes control of Sealand on August 10; Roy Bates
retakes Sealand in dawn helicopter raid on August 15.

1987: Britain extends territorial waters to 12 miles, encompassing Sealand.
Sealand claims its own 12-mile territorial waters.

1999: Sean Hastings and Ryan Lackey conceive of idea for HavenCo.

2000: HavenCo launches to massive press hoopla.

2002: HavenCo taken over by Sealand after commercial failure and mounting
tensions.

2006: Sealand badly damaged in generator fire.

2008: HavenCo website goes offline.

2009: Sealand launches Twitter account.

A data haven is "the information equivalent to a tax haven," a country that
helps you evade other countries' rules on what you can and can't do with your
bits. (Think "Swiss banking" for data.) The best-known example comes from
Neal Stephenson's 1999 best-seller Cryptonomicon, whose heroes go up against
murderous warlords, rapacious venture capitalists, and epic authorial
digressions in their quest to bring untraceable communications to the masses
and get rich in the process.

The idea, and the term, come out of 1970s and 1980s debates over whether
companies could get around pesky privacy protections by shipping their
magnetic tape reels to a country with laxer privacy laws. What started off as
a pejorative term flipped to a positive in the eyes of the cypherpunks. They
saw governmental restrictions on the free flow of informationbprivacy,
copyright, sedition, drug-making instructions, or whateverbas grave threats
to personal freedom. Cypherpunks hoped a borderless Internet, together with
strong cryptography and a friendly data haven or two for their servers, would
destroy the government's ability to snoop on and censor online speech. It
would all lead to a new age of genuine liberty.

Hastings was a true believer. On Anguilla, he founded a data haven company
named IsleByte and worked on open-source electronic currency software. But he
was getting increasingly frustrated with Anguilla. He expected a "libertarian
mecca," but the actual Anguilla sharply restricted both gambling and
pornography. Worse, he was finding Anguilla's legal system frustrating to
deal with, something between a bureaucratic nightmare and a straight-up
shakedown.

At the Financial Cryptography conference, Hastings amused and fascinated the
other attendees with a data haven variant soon dubbed the "Toxic Barge
Project". The idea was to buy a ship, fill the top of the hold with computer
severs and the bottom with the nastiest toxic waste imaginable, then plant
yourself in international waters near a major port and start offering
co-location services. As Hastings explained, the toxic waste "forces the
large military power to protect you from outside threats, while being very
hesitant to attempt to board your vessel."

The barge idea went nowhere, but it marked Hastings as the go-to guy for
out-of-the-box data haven schemes. After Hastings moved back to the United
States, one of the other conference attendees, a gregarious and energetic MIT
dropout named Ryan Lackey, crashed with him in early 1999. Lackey had his own
geek and libertarian cred, along with a sense of adventure that would later
take him to Iraq to perform IT work during the American occupation.

The two men started thinking seriously about where to place an actual,
practical data haven. They looked at several Pacific islands and even
contemplated building their own artificial island on the Cortes Bank, a
hundred miles out into the Pacific from San Diego. But then, flipping through
Erwin Strauss's cult classic How to Start Your Own Country, they found
Sealand. Strauss described it as the most successful micronation of all
timeband it looked like a perfect fit for their project.

Helicopter approach to Sealand

Ryan Lackey

Photograph by Ryan Lackey

The Principality of Sealand

"Sealand" is a 120-foot by 50-foot deck on a pair of hollow concrete legs. It
stands proudly a few dozen feet off the waves in the North Sea, seven miles
off the English coast. It was built during World War II to provide
antiaircraft defense for the Thames Estuary and given the name "Roughs
Tower."  The platform and legs were mounted on a pontoon, which was towed
into place, then flooded to create a stable base on the seabed.

After the war, Roughs Tower sat empty until the pirate radio bubble of the
1960s. Entrepreneurs trying to get around the BBC's broadcasting monopoly
took to ships and offshore forts, setting up primitive radio stations staffed
by adventuresome young music lovers who didn't mind bad food and harsh
conditions. One such station, Radio Essex, was run by one of world's great
lovable rogues, Roy Bates. As one of his DJs, David Sinclair, would later put
it, "Roy was a throwback. He should have been born in the time of the first
Queen Elizabeth and sailed with Drake. ... [H]e was the kind of man who had
creditors everywhere, but it never seemed to bother him." 

Bates first set up shop on Knock John, one of Roughs Tower's sister
platforms, by evicting the staff of another pirate station already onsite.
But Knock John was inside the three-mile limit of English territorial waters,
and the government successfully prosecuted Bates for unlicensed broadcasting
in the fall of 1966.

Unfazed, Bates packed up his equipment and moved out to Roughs Tower on
Christmas Day 1966. That it was already occupied by employees of Radio
Caroline didn't slow him down. Roy Bates's crew, Sinclair explained, "had
earnt a fearsome reputation for skulduggery, as 'the hard bastards of the
North Sea.'" They intimidated Radio Caroline into leaving. 

Unfortunately, the penny-pinching Bates left his men alone on Roughs Tower
with only three days worth of foodbthey lasted 17 days before calling a
lifeboat to be evacuated. Radio Caroline moved back to the platform in April
1967, but foolishly entered into a joint operating agreement with Bates.
Through a combination of subterfuge and force, Bates managed to replace all
of the Caroline employees with his own men. He spent the next few months
fighting off Radio Caroline boarding parties with an air rifle and petrol
bombs. (The violence was hardly unusual: Adrian Johns's excellent Death of a
Pirate tells the particularly memorable story of how one pirate broadcaster
shot and killed another.)

Sealand, just off the English coast from Harwich

Google Maps

A new broadcasting act, passed in the summer of 1967, put an end to Roughs
Tower's usefulness as a pirate radio base by sharply cracking down on the
landlubbing advertisers and suppliers who kept the offshore stations going.
But Roy Bates had an even grander scheme by this point: running his own
country. On September 2, 1967, he declared that Roughs Tower was now the
independent Principality of Sealand, and he named himself Prince.

If the British government had been worried about Roy Bates before, it was
positively alarmed once he started hurling Molotov cocktails and calling
himself Prince Roy. But every time the government came up with a scheme to
oust him, Bates found a way to spin the story to make the bureaucrats look
like bumbling bullies. He turned out to be a grandmaster of the preemptive
press strike.  Five stranger-than-fiction Sealand facts

    During the initial flooding, the pontoon filled unevenly with water,
causing the tower to list 30 degrees to starboardbwith 100 crewmen aboard.

    The one ship to fly the Sealand flag was ultimately sold to MGM and blown
up for a scene in the Tommy Lee Jones movie Blown Away.)

    After failing to seize control of Sealand in 1978, Alexander Achenbach
set up a government-in-exile that dabbles in perpetual motion machines, UFOs,
conspiracy theories, and revisionist history.

    A generator on Sealand caught fire in 2006, requiring an RAF rescue
helicopter to airlift the lone crewmember on board to the British mainland
for medical treatment.

    A shadowy Spanish crime ring produced thousands of "Sealand" passports in
the late 1990s, including fake diplomatic credentials.

Customs tried to deny Bates permission to take his leaky boat out of port,
arguing that it was unseaworthy. Bates got the Times of London to run a story
saying his children were "marooned" on Sealand, and Customs backed down. 

The government tried to buy him out, but Bates caught wind that a marine
detachment was on standby to occupy the platform as soon as he left.
"Commandos Set to Seize Fort," read the Times headline and the plan was
dropped. 

Bates even appears to have run one of his employees as a double agent,
tricking the Ministry of Defense into making an ill-considered offer to take
over the fort if the employee took it from Bates. "Ministry Planned to Seize
Sea Fort," read the headline in the Daily Telegraph. The government had to
submit to the embarrassment of Parliamentary questioning over the incident.

The government's last serious attempt to get rid of Bates involved bringing
him up on firearms charges after his son Michael fired a pistol at a
government vessel working on a nearby buoy. Bates was acquitted in October
1968 when the court ruled it lacked jurisdiction over firearms offenses
committed on Roughs Tower. At this, the government gave up. An ad hoc
committee in the Cabinet Office concluded:

    Mr. Bates' continued occupation of the Tower was undesirable, because of
the shooting incident and the possibility of further violence, and also
because of the small but continuing threat that the Tower could be used for
some illegal activity not at present foreseen. Nevertheless, he was doing no
actual harm, so far as was known, and the Ministry of Defense had no need of
the Fort themselves. There were no pressing reasons for evicting Mr. Bates,
certainly none that would justify the use of force or the passage of special
legislation.

The next 30 years in Sealand history are one improbable scheme after another.
Stamps and coins quickly turned into grandiose plans for offshore banking and
tourism. By the mid-1970s, Sealand's associates were passing around a
brochure showing how Sealand would be built out to include a hotel, a golf
course, a tanker port, and even an airport. In the late 1980s, Sealand served
as a flag of convenience for an American pirate broadcaster who lasted three
days off of Long Island before the FCC shut him down. The Bateses optioned
their story to a screenwriter, and although Emma Watson was at one point
allegedly attached to the project, nothing came of it. Even a 2008 Red Bull
skateboarding video was filmed on Sealandbwatch for the board over the side
at 2:49.

If this all sounds rather two-bit, it was. Whether or not Roy Bates spent a
million pounds on Sealand, as he sometimes claims, the "rusting heap of junk"
was no Monaco. For most of its history, Sealand has been the world's most
impractical vacation home. The Bateses visit regularly and keep the place
manned at all times, but they live ashore. HavenCo remains Sealand's one true
brush with real money and real fame.

Rigid inflatable boat used to ferry people and supplies to Sealand

Ryan Lackey

The initial satellite Internet connection on Sealand

Ryan Lackey

The founding of HavenCo

Sealand was an inspired choice for the data haven project. Roy Bates's son,
Michael, was running Sealand on a day-to-day basis as the Prince Regent by
the 1990s. Michael inherited his father's distaste for authority and his
fondness for swashbuckling antics. A professional fisherman, he was hardly a
computer geek. But he recognized in Hastings and Lackey the same cheeky
outlaw spirit that had brought his own family to Sealand and kept it there
for decades. Hastings and his wife flew out to visit Sealand, and a mutual
love-in quickly followed.

Like any good dot-com-trepreneurs, Hastings and Lackey incorporated. They
called the new venture HavenCo, for "Haven Co-location." The pitch was
simple. HavenCo would offer secure, anonymous hosting from Sealand.
Microwave, fiber, and satellite links would provide fast and redundant
bandwidth. Sealand's concrete legs would be kitted out with server racks and
uninterruptible power suppliesband then, for additional security, flooded
with nitrogen, so that only authorized techies wearing scuba gear could would
have physical access.

Who would host data there? HavenCo had plenty of ideas, including businesses
looking to avoid pesky subpoenas, the Tibetan government-in-exile, anonymous
currencies, and porn. Only a few things were off limits: spam, child
pornography, and hacking attempts directed at HavenCo itself.

Sealand's canned food pantry

Ryan Lackey

Well-known geeks Avi Freedman and Joi Ito came onboard as investors. Sameer
Parekh was named chairman of the board. The company copied its bylaws from a
do-it-yourself guide and drew up a detailed business plan with the kind of
explosive growth assumptions everyone made during the dot-com boom: $65
million in revenue by the end of three years and a half-billion-dollar IPO. 

The new company promised customers "First World" infrastructure but with
"Third World" regulations and taxes. Its sloganb"the free world just
milliseconds away"bplayed up the cyberlibertarian idea that the Internet was
about to make geography irrelevant.

The violence inherent in the system

Roy Bates has always been eager to find business partners. One of them,
Alexander Achenbach, a former diamond dealer who seems to have been involved
with an illegal diploma mill, drafted a constitution for Sealand, was named
its minister for foreign affairs, and went around trying to persuade other
nations to recognize Sealand. For reasons that are still unclear, he decided
to oust Bates and install himself as head of state in 1978.

Achenbach invited Roy and Joan Bates to a meeting in Austria with a group of
investors. It was a trick to get them off of Sealand while his lawyer, Gernot
PC<tz, together with a pair of Dutchmen, occupied it from a helicopter.
Michael Bates had been left alone on Sealand and let them land. They repaid
his kindness by locking him inside, holding him prisoner for a few days, then
putting him on a passing fishing boat.

Roy Bates was never the kind of man to take anything lying down. He assembled
a helicopter strike team of his own. They attacked at dawn on August 15,
1978, five days after the original invasion. A brief and tense standoff ended
after Michael Bates accidentally discharged his shotgun, leading PC<tz and the
Dutchmen to surrender. Prince Roy now put the erstwhile invaders on trial,
holding PC<tz prisoner until he could pay a fine of 75,000 Deutschmarks (more
than $50,000).

The German government threw a diplomatic snit fit. They called the incident
"in a way an act of piracy, committed on the high sea but still in front of
British territory by British citizens." But the British government was now
happy with their position: what happened on Sealand was not its problem. The
whole affair only blew over with PC<tz's release on September 28.

The story is slightly fishy. At one point during the hostage drama, the
German embassy told the press the whole affair was a publicity stunt. The
Bateses would later retain PC<tz as their own lawyer. But there is no
conclusive evidence to establish that the coup was real or fake. The truth
may well be somewhere in between.

The next thing to do was drum up publicity for the new venture. Here, too,
the HavenCo-Sealand pairing was made in heaven. Roy and Michael Bates had
been working the press brilliantly for years. Add charismatic geeks to
Sealand's inherent romance and the story was irresistible. HavenCo parlayed
its memorable business model into a Wired cover story by Simson Garfinkel.
Even today, it remains one of the best pieces of tech journalism of all time.
That was quickly followed by dozens of other newspaper and TV stories. The
press queries came so fast and furious HavenCo barely had the time to respond
to inquiries from potential customers.

As journalists covering HavenCo's launch recognized, security was absolutely
central to its business model. It seemed likely that a data center hosting
content too hot to put anywhere else was likely to attract some enemies. The
press asked some probing questions about how HavenCo would protect its
customers' data, both physically and virtually.

No problem, according to HavenCo. The redundant communications links would
make it impossible for any one country to cut off access. The
nitrogen-flooded server rooms would keep casual intruders out. Not that
they'd have an easy time getting there in the first place. Sealand's main
deck stands 24 feet off the surface of the waves:. The only ways on are by
helicopter, an extraordinarily precarious ladder, or the hair-raising
experience of being winched on board in a bosun's chair. Just to make sure,
HavenCo planned to post round-the-clock guards packing machine guns. Even in
the worst case, HavenCo would destroy the server rather than hand over the
databbut if it did, the customer would receive a full refund.

Even better, Sealand had a demonstrated history of fighting off invaders. It
started with the defense against Radio Caroline in 1967, and continued for
years with Michael Bates's habit of taking the occasional shot across the bow
of passing ships. That wasn't all. In 1978, Sealand defeated an
honest-to-goodness armed coup orchestrated by its own minister for foreign
affairs, Alexander Achenbach. After a five-day occupation, the Bateses retook
the platform at shotgun-point.

The Sealand data center (later moved off the fort to London)

Ryan Lackey

HavenCo falls apart

Despite all the big talk, HavenCo never came even close to success. It had at
most a dozen customers. Other than the makers of an unauthorized accelerator
for IBM's AS/400 minicomputers, most of the business came from online
gambling. The huge racks of servers, the nitrogen, and the machine guns never
even existed in the first place. The dot-com crash not only cut the bottom
out from colocation pricing, but also took out HavenCo's fiber-optic link
when the company providing it went bankrupt. That left the entire operation
with a pokey 128Kbps satellite link, which staggered badly under
denial-of-service attacks.

Ryan Lackey

Ryan Lackey

Sean Hastings left the company for undisclosed personal reasons in 2000.
Relations between Lackey and the Bates family gradually deteriorated. Lackey
could tell the Bateses and their advisors didn't share his cypherpunk
enthusiasm and he decried their bumbling and self-dealing attempts to make
technical decisions. But his own increasingly secretive waysbhe started an
anonymous remailer without telling anyone, for instancebundermined Sealand's
trust in him. In a recent e-mail interview with Ars Technica's Nate Anderson,
Michael Bates explained that Lackey "was out of control" and "became doctor
evil in his lair."

The final straw came in May 2002, when Sealand's advisors decided against
allowing HavenCo to host an unlicensed streaming-video service. (The scheme,
which involved buying DVDs and streaming video from them to one customer at a
time, bears a striking resemblance to the recently-enjoined Zediva.) Lackey
saw it as exactly the sort of service HavenCo had been created to host, but
the Sealanders decided that it risked undermining Sealand's relationship with
the United Kingdom. A deal was negotiated, under which Lackey would be repaid
the $220,000 he had put into HavenCo and continue as a reseller of HavenCo
services but turn over day-to-day operational control.

Lackey was barely off the platform when the deal broke down. In his view,
HavenCo had been "nationalized" by Sealand. This locked him out, physically
and virtually. The company even confiscated his personal computers. The newly
reorganized HavenCo issued a statement that Lackey was no longer an employee,
and it adopted a new and much more restrictive acceptable use policy. The
next five years were a sad study in decline. HavenCo no longer had real
technical experts or the competitive advantage of being willing to host
legally risky content. What it did have was an absurdly inefficient cost
structure. Every single piece of equipment, drop of fuel, and scrap of food
had to be brought in by boat or helicopter. By 2006, "Sealand" hosting was in
a London data center. By 2008, even the HavenCo website was offline.

What went wrong

Despite all of HavenCo's worst-case planning and bring-it-on rhetoric, the
nations of the world never had to lift a finger to topple it. It failed of
its own accord. In hindsight, it's hard to identify just one cause; HavenCo
had so many problems, its failure was overdetermined.

As a starting point, HavenCo's only serious advantage was its liberal
acceptable use policy. Seven miles out into the North Sea is a terrible place
to put a data center. HavenCo was never going to be able to compete with the
big boys in the colocation business who can choose between cheap real estate
and being right next to interconnection points. So it needed to be able to
offer its customers security advantages that outweighed its high costs.
Unfortunately, it couldn't.

The Sealand coat of arms

Wikimedia Commons

Most importantly, Sealand almost certainly isn't an independent nation,
notwithstanding Roy Bates's claims to the contrary. The 1968 decision
acquitting him on firearms charges was hardly a ringing endorsement of
Sealand's claims. Instead, it had much more to do with England's byzantine
legal system, which at the time was chock-full of medieval holdovers. The
court made clear that Parliament could have set up the English legal system
in a way that gave the county courts jurisdiction over Roughs Tower, it just
hadn't actually done so. In 1987, when the United Kingdom extended its
territorial waters from three up to 12 miles, it did just that.

In fact, Alexander Achenbach, the German pretender, accidentally precipitated
a court ruling that Sealand isn't a real country. When he was still in
Sealand's good graces, he attempted to renounce his German citizenship on the
grounds that he was now a citizen of Sealand. In May 1978, a German court
denied the request in a ruling that explicitly consideredband rejectedbthe
idea that Sealand is an independent country.

Even if Sealand were "officially" its own country, independence isn't worth
much without allies. Any nation with warplanesbno, make that any nation with
an inflatable boat and an outboard motorbcould blow the place up. The only
thing stopping it would be the United Kingdom's displeasure at explosions in
its territorial waters. Any protection offered by Sealand's larger neighbor,
however, would presumably come with enough strings attached to raise the
question of why the servers should be on Sealand rather than onshore. The
United Kingdom has been leaving the Bateses alone since 1968 mostly because
they're such clever chaps that ousting them would be more embarrassment than
it's worth.

HavenCo's collapse also shows a truly deep irony in its business model. By
putting itself outside of other countries' legal systems, it put itself
completely at Sealand's mercy. In hindsight, Ryan Lackey explained, "While I
could sue HavenCo and/or directors for breach of contract, etc., ... it would
presumably lead to a negative resolution of the Sealand sovereignty issue."
Sealand is a toy nation with a toy legal system, not a stable business
environment. Prince Roy and Prince Regent Michael might be fun to raise a
glass with, but they don't inspire the kind of confidence an independent
judiciary would. On Sealand, Sean Hastings and Ryan Lackey unwittingly
recreated everything that drove them out of Anguilla in the first place.

HavenCo's heirs

Sealand isn't going to save WikiLeaks any more than putting the site's
servers in a former nuclear bunker would. The legal system figured out a long
time ago that throwing the account owner in jail works just as well as
seizing the server. Unless Julian Assange is willing to move to Sealand for
the rest of his life, he'll be somewhere the long arm of some country's law
can reach. The corollary is that if WikiLeaks thrives, it will be because
some countrybone the rest of the world respects more than Sealandbdecides it
sees nothing seriously wrong with what WikiLeaks has done.

The same goes for everyone else who's muttered about moving to Sealand. With
monotonous regularity, someone proposes putting outlaw data there and asks
for money to make it happen. In 2001, a Canadian college student tried to
raise $15,000 to put an OpenNap server on Sealand. In 2007, the Pirate Bay
started passing the hat for a "buy Sealand" fund. It took in $20,000broughly
one ten-thousandth of the estimated price. But Sealand alone isn't going to
gain them much.

Take one of HavenCo's classic lines of business: porn. Why would someone
wanting to send vanilla pornography into Saudi Arabia need to bother with
Sealand? That stuff's legal in the United States. The only content that
couldn't be hosted somewhere else would be content that's illegal
everywherebmeaning the nations of the world would find it quite easy to gang
up on Sealand, or be willing to look the other way while someone knocked it
into the sea.

Governments have powerful virtual tools as well. In the last decade, China
has proven that national Internet filtering can be made to work, if not
perfectly, than at least reasonably well. Other repressive regimes have been
paying attention. SOPA and PIPA's proposed Internet filtering regime showed
many in the United States would be willing to go there, too. Discrete data
havens are going to have recognizable IP addresses, and as soon as a
government sets up a blacklist, you can bet those addresses will go on it.
Indeed, the very pressure for SOPA-style blocking shows why data havens as
such have been a sideshow to the real fights over Internet policy. Copyright
owners have discovered, to their horror, there are plenty of foreign sites
hosting the kind of rips and wares that might get you shut down within the
United States. Who needs Sealand when you've got Spain?

That's the deal with the Anti-Counterfeiting Trade Agreement (ACTA) and other
trade agreements, too. These put diplomatic and political pressure on other
governments to make their IP enforcement systems more beholden to United
States copyright owners. The very fact this is still an ongoing battle shows
that plenty of countries will still host material the United States
government disapproves. In a sense, the state of free speech on the Internet
has never gotten bad enough to make HavenCo necessary.

Sunset falls on Sealand

Ryan Lackey

Learning from HavenCo

HavenCo was always an awkward way station on the road to the real cypherpunk
vision: perfect, anonymous cryptography in the hands of the masses. It
doesn't matter where the bits are stored if no one can tell what they are.
HavenCo's founders understood this. Sealand was just a temporary stopgap
until the good crypto was up and running. Tor and PGP have done far more for
free speech than Sealand has, albeit with less nautical flair.

HavenCo's trouble also underscores the dangers of treating "law" as though it
were "code."  HavenCo thought it had found the perfect legal loophole: a
country with the legal right to ignore other countries' laws. But this legal
GC6del sentence didn't work because, in the real world, if a country's laws
aren't catching the people they're intended to catch, the country can just
change its laws. As Cindy Cohn of the Electronic Frontier Foundation likes to
say, "You can't hack the law."

Legal systems are like Soylent Green: they're made out of people. If you want
to protect civil liberties using law, you need to get people on your side who
share your vision of what law stands for. That's why the SOPA protests were
so effective. They converted an argument about justice into real-world
political power.

One more story from pirate radio history illustrates the paradox at the heart
of HavenCo. In the summer of 1967, the pirate radio ship Laissez Faire
radioed a distress call. Two factions on board were fighting. There were
threats of murder. The authorities did nothing, explaining that the pirates
"had deliberately placed themselves outside the reach of the law." TouchC). 

HavenCo couldn't live with law, and it couldn't live without it.

James Grimmelmann is an Associate Professor at New York Law School.