Treasure Island

Published Dec 11, 2003
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There are many reasons to want to keep information away from prying eyes. For most of us it may be perfectly legitimate – such as protecting sensitive business information, private bank accounts, or anything personally important to you. For others it may be records of money laundering, child pornography or plans for terror attacks. Legitimate or not, there is a huge demand for the secure storage of data. And this creates business opportunities.

In Neal Stephenson’s 1999 bestseller, Cryptonomicon, the protagonists want to build a sort of secure bank for information – a data haven. They ally themselves with the sultan of a fictional island off the Philippines, who declares that any data stored on the many large servers located in a huge cave, known as the Crypt shall be totally exempt from any unwelcome scrutiny. This means that anyone – anyone with the means to pay for secure storage – can leave their data in the Crypt, encrypted and treated with the same discretion and respect for privacy as the money in a Swiss bank account. Or one in the Cayman Islands, depending on your taste in banking.

Treasure Island-Body

Sealand was founded as a sovereign Principality in 1967 in international waters, six miles off the eastern shores of Britain. Here the Sealand coat-of-arms, from their official web-site at

While the Sultanate of Kinakuta and the Crypt may be fictional, the concept of data havens is not. And one colourful man, sitting on an old concrete fortress off the coast of England, is making a business out of it. The Principality of Sealand, founded in 1967, is located on an old World War II gun platform, six miles from the eastern coast of England. The self-proclaimed head of state Prince Roy want to create a business that will make him the Internet equivalent of an offshore banker.

The Principality was proclaimed in 1967 by Prince Roy – formerly Roy Bates – on the World War II gunnery station Roughs Tower, and instantly declared to be free of British jurisdiction. This declaration was, curiously, upheld by a British court decision the following year, and so the Principality of Sealand has existed since, issuing its own passports and currency – the Sealand Dollar. Despite the fact that Sealand is not recognized as a sovereign state by any country.

The promise of a place free of any national jurisdiction gave several Internet pioneers – who had undoubtedly read Cryptonomicon – the idea that this concrete island would be the perfect place for a truly independent server park, and realized that there were plenty of people who would pay top dollar for that kind of information storage. In May of 2000, HavenCo was launched, and declared to be “the first place on Earth where people are free to conduct business without someone looking over their shoulder,” as HavenCo spokesman Bill Scannell put it.

The company is registered in Antigua, but all the hardware, and the physical location of HavenCo is on Sealand. Armed guards, ensuring that no boats or small aircraft come too close, protect the island. Only authorized persons directly involved in the HavenCo project are permitted to land on the island. In addition, several computer technicians are employed to take care of daily operations and maintenance work on the servers, repairing damaged disks and installing new equipment.

Few regulations
The company states that it provides “a suitable facility from which to host their eCommerce, financial transaction, B2B and email servers as well as sensitive data backups.” Their terms of use, however, indicate that they harbour a liberal view towards what may be stored on their servers. They state:

“For instance, if a customer’s machine is hosted on Sealand by HavenCo, content which is illegal in Sealand may not be published or housed on that server. Sealand’s laws prohibit child pornography. Sealand currently has no regulations regarding copyright, patents, libel, restrictions on political speech, non-disclosure agreements, cryptography, restrictions on maintaining customer records, tax or mandatory licensing, DMCA, music sharing services, or other issues; child pornography is the only content explicitly prohibited.”

In addition, the location outside national jurisdictions offers additional benefits to the privacy-minded. The Principality of Sealand requires no direct reporting or registration. This makes the island ideal for Web business. It also makes it ideal for people who don’t really care for written records of transactions and names on contracts. HavenCo’s statutes do not specifically address the question that instantly springs to mind: Do they intend to make their data haven a haven for criminal activity? Or, more precisely: Do they take a stand on this issue at all? Many hardcore liberalists argue total freedom of information, but they mostly amend their position when it comes to protecting the privacy of drug dealers and terrorists.

HavenCo operates under laws that are liberal to the point of being almost nonexistent. This means that almost anything can be hosted on the Sealand servers: Illegal gambling sites, any kind of adult pornography, terrorist instruction guides, nazi propaganda, you name it. But, since the company is run by idealists with the firm belief that the Internet should be a place of freedom of information, but with no taste for organized crime or Nazis, they do not accept the business of just anyone. Customers are largely gambling sites, but an increasing number of political groups, such as the Tibetan Government in Exile, are based there in an effort to escape government censorship. They will have to pay a stiff price, though – secure colocation through HavenCo starts at $7500 a year for the least expensive package, and runs to $35000 for the deluxe service.

Idealism meets capitalism
HavenCo are doing well, but haven’t become as dominant as they may have expected. And they haven’t turned into the Internet free-for-all some people expected. They started turning a profit in 2001, and they can keep the company running more or less indefinitely as long as they don’t have to pay taxes to the British government, or leas expensive office space on dry land.

As for the British, they continually state that, the 1968 legal decision notwithstanding, they do not regard the Principality of Sealand as a sovereign state, and expects any company operating from the island fortress to comply with British law. So far, the Principality has done pretty much as it pleases, and the British government haven’t tried to take action against Sealand. This may change, however, if HavenCo becomes a real force, or if they slip up, and allow some serious criminal activity – criminal under British law – to be hosted on their servers. Then it will be interesting to see if the Principality of Sealand has any real sovereignty.

In Cryptonomicon, the plans for a data haven that would ensure secure storage, and therefore freedom of information, turns into a chase for gold. Likewise, the idealists that run HavenCo are thinking more about profits than ideology these days. The founder of HavenCo, Sean Hastings, left the project last year to pursue other interests. But the idealism is not completely gone. The most visible HavenCo employer today, is Ryan Lackey, the CTO, who is in his early twenties. He shows the mix of ideology and profit-orientation in what he told the BBC online in July this year: “We believe that people have a right to communicate freely,” said Ryan Lackey, co-founder of HavenCo. “If they want to operate certain kinds of business that don’t hurt anybody else, they should be able to do so.” And, if the British leave them alone, HavenCo will continue to offer a very safe place for your data.

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