Fractured Relationship Between New Zealand and Cook Islands Deepens Over ‘State-Sanctioned Hacking’ Bill
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Confidential documents leaked to 1News reveal the Cook Islands government has been considering a new plan to seize tainted cryptocurrency worldwide, in what experts describe as “state-sponsored hacking.” The controversial proposal has raised serious concerns in Wellington and further strained ties between New Zealand and its realm partner.
A Controversial Bill Resurfaces
The Cook Islands Cryptocurrency (Ransomware Suppression) Bill 2025 — currently under internal review — was drafted by Drumcliffe, a US company previously involved in a failed attempt to introduce a similar law last year. That earlier version was rejected as unconstitutional and accused of effectively validating criminal activity, according to Crown Law advice in Rarotonga.
Drumcliffe’s principal, James Little, recently visited the Cook Islands to meet with senior government figures, including Prime Minister Mark Brown. While Drumcliffe declined to comment on the current draft, experts say the new version still includes alarming provisions.
Experts Warn of ‘State-Sanctioned Hacking’
Under the proposed law, private agents would be permitted to hack into online accounts suspected of holding tainted cryptocurrency and seize the assets without a warrant — relying only on “reasonable grounds.”
Cybersecurity specialist Jeff Nijsse from RMIT University said the bill explicitly authorises tactics such as:
Exploiting system vulnerabilities
Bypassing authentication mechanisms
Installing backdoors for future access
“There’s nothing to stop recovery agents from engaging in what I would call state-sanctioned hacking,” Nijsse said, warning that the Cook Islands could face severe international backlash.
Security Experts: ‘It Could Make Them a Target’
Dr Jose Sousa-Santos, from the University of Canterbury’s Pacific Regional Security Hub, said the proposal could expose the Cook Islands to retaliation from cybercriminals and organised crime groups.
“The Cook Islands does not have the infrastructure or capability to engage in these kinds of activities,” he said. “If criminal entities target the country in response, it could make them an international target.”
New Zealand Government Alarmed
The New Zealand Government — which oversees foreign affairs for the Cook Islands under the Realm of New Zealand free association agreement — was not consulted on the proposal, despite the clear security implications.
A spokesperson for Foreign Affairs Minister Winston Peters said the bill adds to “a series of actions” that have strained relations recently, including:
Plans for a separate Cook Islands passport
Misuse of the Cooks shipping registry
Controversial China agreements signed without NZ consultation
Just last week, Peters suspended $30 million in aid to the Cook Islands following the unapproved China deals.
“We have previously expressed serious concerns about legislation allowing the seizure of cryptocurrency outside the Cook Islands’ jurisdiction,” the spokesperson said. “Such actions could contravene New Zealand law, undermine our national security, and breach the rights of New Zealanders.”
Cook Islands: Bill Still Under Review
In a statement to 1News, the Cook Islands government confirmed the bill had not been tabled in Parliament, saying it was still undergoing “internal processes to ensure it aligns with legal standards, national priorities, and international obligations.”
But with mounting criticism and Wellington’s patience wearing thin, the latest controversy marks yet another serious fracture in the NZ–Cook Islands relationship — one that could reshape how the two countries navigate their shared realm in the future.