An Island Fortress of Internet Privacy

The handful of crypto activists living in the world's smallest country is prepared for a blockade. Driven by a passion for Internet privacy, they've brought enough food, water and fuel for a year and moved to Sealand, a 25-yard-long steel and concrete former World War II fortress six miles from the English coast. In 1967, an eccentric former British major named Roy Bates declared Sealand a sovereign territory, eventually issuing his own stamps, flag and currency. Forty-four years later, Bates, now the crown prince of Sealand, has leased his island to a group of techno-libertarians and their start-up, a data sanctuary called HavenCo which promises cyber security and which may affront many of the world's major nations.

If it sounds like sci-fi, it kind of is -- Neal Stephenson imagined a similar scenario in his 1999 novel Cryptonomicon. But HavenCo, which launched this summer, is entirely for real. Colocation, HavenCo's business, may sound dull, but the enterprise raises deep questions about national sovereignty in a world of global regulations, about goverments' power to police the net and about who gets to set privacy standards in a borderless world.

Headed by 32-year-old American Sean Hastings, HavenCo sells server space to privacy-minded individuals who want their online dealings safe from government regulations and searches. As the HavenCo website says, "Sealand has no laws governing data traffic, and the terms of HavenCo's agreement with Sealand provide that none shall ever be enacted."

Of course, many world powers are unlikely to be pleased about a business dedicated to subverting their regulatory authority. In fact, at a cybercrime conference in Paris this spring, French Interior Minister Jean-Pierre Chevenement argued for an international treaty outlawing enterprises exactly liking HavenCo, saying, "The idea is to produce a global text so there cannot be 'digital havens' or 'Internet havens' where anyone planning some shady business could find the facilities to do it." Though HavenCo's sovereignty was affirmed in a 1968 British court decision, it will be hard for the tiny territory to stand up to the world's superpowers.

Still, 78-year-old Prince Roy is indignant at the idea that his rule might be threatened. "Does America worry about repercussions internationally?" he asked. Meanwhile, Hastings is sanguine. "This type of business is the future of the world and it's extremely mobile -- it can go where regulation is most favorable. The risks involved with HavenCo aren't that much greater than any startup company."

Then again, Hastings tends towards optimism. Besides his ardent libertarianism, he also subscribes to transhumanism, the belief that medical technology can ultimately help us beat that "genetically inherited" disease called death.

But Hastings can't be dismissed as just a code-addled dreamer. He and his wife, Jo, HavenCo's Chief Marketing Officer, have practical experience in offshore Internet enterprises. Together, they spent a year working on the British West Indies island of Anguilla. She specialized in setting up Internet casinos, while he worked on an e-cash system called Saxas with Vince Cate, who gave up his U.S. citizenship to protest American cryptography laws (he currently carries a Mozambique passport). While Saxas eventually fell apart, the experience prepared Hastings for HavenCo. The idea for the company was born in 1998, when Hastings met the "cypherpunks" who would become his partners at the Financial Cryptography Conference held on Anguilla.

While Hastings is enthusiastic about the benefits of working with tiny governments, he may be about to run into one of the obstacles inherent in them -- laws that are subject to a ruler's whim. While HavenCo is meant to be a libertarian oasis, banning only child porn, spam and hacking, Prince Bates seems to have different ideas. "There will be no pornography, nothing improper, or illegal or unpleasant," the royal said emphatically. "We don't want to break law in any country or any place in any way." And if HavenCo's founders disagree? "I happen to be the sovereign, so I am the ultimate judge of everything," the prince declared. "There will be no disagreement."

Hastings stresses that his clients' data will be secure even if his relationship with the prince sours. Besides, he says, HavenCo has signed a contract with the prince to lease Sealand until the end of the year, after which it has the option to purchase the place and write a new, "very libertarian" constitution. Still, admits Hastings, "one must be aware that this contract is only valid in Sealand."

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