SEC Commissioner Peirce Urges Stronger Crypto Privacy Protections

In a recent series of public addresses, U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce emphasized the necessity of reinforcing financial privacy in the digital era, with a specific focus on protecting the rights of cryptocurrency users [1]. Speaking at both the 2025 Blockchain Conference and the Science of Blockchain Conference, Peirce highlighted the transformative potential of blockchain technology in reducing dependency on traditional financial intermediaries and empowering individuals to have greater control over their digital assets [2]. She underscored the importance of ensuring that the right to self-custody and the use of privacy-preserving tools are central to regulatory discussions [3].

Peirce’s remarks arrive at a time when concerns over crypto surveillance are intensifying, and regulators are playing an increasingly pivotal role in shaping the landscape of financial privacy. She criticized existing legal frameworks, such as the Bank Secrecy Act, for being outdated and unsuited for the evolving digital economy [4]. Peirce also voiced support for measures that would allow individuals to transact privately without the threat of unwarranted oversight [5]. Her comments have been interpreted as a strong endorsement of the principles of decentralization and individual autonomy in the financial system.

The emphasis on privacy aligns with the broader objectives of the SEC’s ongoing Project Crypto, a regulatory initiative aimed at modernizing the agency’s approach to digital assets. Earlier this month, SEC Chair Paul Atkins echoed this sentiment, stating the importance of developing a regulatory environment that enables software developers to innovate within on-chain systems [6]. This indicates a growing acknowledgment within the SEC that crypto privacy is not just a technological challenge, but a regulatory imperative.

Despite this alignment, the SEC remains internally divided on how to address the issue. While Peirce advocates for a more permissive and innovation-friendly stance, Commissioner Caroline Crenshaw has expressed skepticism. In a recent statement, Crenshaw criticized the SEC’s new guidance on liquid staking as vague and legally unsound [7]. She raised concerns that the guidance, which asserts that liquid staking activities do not constitute securities offerings, lacks a robust legal foundation and is not legally binding [8]. Crenshaw further noted that the guidance does not reflect the consensus of the Commission and should not be considered a reliable basis for regulatory compliance [9].

These contrasting views highlight the ongoing tension within the SEC between fostering innovation and ensuring regulatory oversight. Peirce’s push for stronger crypto privacy has been widely welcomed by parts of the industry, seen as a step toward a more user-centric financial ecosystem. However, the mixed messages from the agency suggest that the regulatory landscape remains in flux. As the SEC continues to navigate the complexities of digital currencies, the debate over privacy and regulation is expected to remain a central topic in policy discussions [10].

Source: [1] Bitcoin News Today: SEC Commissioner Peirce Pushes for ... (https://www.ainvest.com/news/bitcoin-news-today-sec-commissioner-peirce-pushes-crypto-driven-financial-privacy-reform-2508/)

[2] SEC's Hester Peirce Makes Case for Crypto Privacy Rights ... (https://www.mitrade.com/insights/news/live-news/article-3-1013574-20250805)

[3] Hester Peirce Calls for Modern Financial Privacy ... (https://www.ainvest.com/news/hester-peirce-calls-modern-financial-privacy-regulations-crypto-era-2508/)

[4] SEC’s Hester Peirce Defends Crypto Privacy, Slams ... (https://coinpedia.org/news/secs-hester-peirce-defends-crypto-privacy-slams-financial-surveillance/)

[5] Peanut Butter & Watermelon: Financial Privacy in the ... (https://www.sec.gov/newsroom/speeches-statements/peirce-remarks-blockchain-conference-080425)

[6] SEC's Crenshaw Blasts Liquid Staking Guidance as ... (https://www.cryptopolitan.com/secs-crenshaw-blasts-liquid-staking-guidance/)

[10] SEC's Hester Peirce Pushes To Protect Privacy and Crypto ... (https://www.ccn.com/news/crypto/sec-hester-peirce-crypto-privacy-disintermediation/)