SEC Commissioner Peirce: US must 'zealously' defend financial privacy in crypto era

The U.S. Securities and Exchange Commission's Hester Peirce defended financial privacy and called on the government to "guard zealously people’s right to live private lives."

In a speech on Monday at a blockchain conference, the Republican commissioner, nicknamed "crypto mom," said the agency should embrace technology that protects privacy and safeguards the right of people to self-custody their cryptocurrency.

"Most fears of financial privacy and the technology that enables it flow from a genuine desire to protect this nation from enemies and criminals," she said. "Safeguarding our families, communities, and country from harm is extremely important, but curtailing financial privacy and impeding disintermediating technologies are the wrong approach."

"The American people and their government should guard zealously people’s right to live private lives and to use technologies that enable them to do so," she added.

Peirce's comments follow a 168-page report released last week by the White House's working group, which outlined recommendations for how crypto should be regulated. The SEC, which is a member of that working group, later announced the launch of " Project Crypto " aimed at updating its rules around crypto, with a focus on onchain. Atkins said agency staff will be working on drafting rules around crypto distributions, custody, and trading.

Privacy is also the focal point of a Tornado Cash co-founder Roman Storm's trial that began a few weeks ago in a federal court in Manhattan. As of this week, the jury is deliberating Storm's verdict. He was charged in 2023 with conspiracy to commit money laundering and sanctions violations for operating the crypto mixer Tornado Cash. Prosecutors say Tornado Cash facilitated more than $1 billion in money laundering transactions and laundered millions of dollars for the Lazarus Group — a sanctioned North Korean hacker group.

Privacy

Throughout the speech, Peirce turned to the Fourth Amendment, which protects people from unreasonable government searches, safeguarding personal privacy.

"We should take concrete steps to protect people’s ability not only to communicate privately, but to transfer value privately, as they could have done with physical coins in the days in which the Fourth Amendment was crafted," Peirce said.

Some crypto advocates called Peirce's speech a "must-read."

"Commissioner Peirce just gave a must-read speech offering one of the clearest defenses of financial privacy in the context of crypto and new technologies yet articulated," said Coin Center Executive Director Peter Van Valkenburgh in a post on X.

Katie Biber, chief legal officer at Paradigm, also showed support for the speech.

"Do you want to live in a dystopia where developers are sent to prison for writing code that lets YOU have financial privacy? I don't. As usual, @HesterPeirce speaks the truth a few years before everyone else gets it," Biber said in a post on X.