SEC chair Paul Atkins warns crypto surveillance, urges privacy first rules

Atkins cautioned that public blockchains can make it straightforward to link transactions to senders and recipients if authorities mandate broad reporting. He said that treating “every wallet like a broker” and “every transaction as a reportable event” could create a de facto surveillance network. “If steered in the wrong direction, crypto could become the most powerful financial surveillance architecture ever invented,” he said.

He added that a balanced framework is possible. “Together, we can shape a framework that ensures neither technological nor financial advancements come at the expense of personal freedoms,” Atkins said, framing privacy as a design requirement rather than an afterthought.

Privacy has become a central policy topic as traditional financial institutions expand their role in crypto and regulators refine oversight. In August 2025, a jury found Tornado Cash developer Roman Storm guilty on a money‑transmitting charge tied to the privacy protocol. Supporters have pursued an appeal. Also in August, Acting Assistant Attorney General Matthew J. Galeotti said that “writing code” is not a crime, a statement that left open how the Department of Justice will approach software‑developer liability in specific cases.

Other SEC officials have stressed civil‑liberties concerns. Commissioner Hester Peirce argued in an August speech that financial privacy is protected by the U.S. Constitution’s Fourth Amendment and urged regulators to “guard zealously people’s right to live private lives.” On 15 December, she reiterated that view, saying privacy should be presumed rather than treated as suspicious: “Protecting one’s privacy should be the norm, not an indicator of criminal intent.”

Atkins’s remarks signal continued work on rules that recognize both the traceability of on‑chain activity and longstanding privacy expectations in finance, with the agency’s task force using public forums to solicit feedback on compliance models that do not require blanket data collection.

As GNcrypto reported on 10 December 2025, SEC Chair Paul Atkins said several ICO categories — network tokens, digital collectibles and digital tools — should not be treated as securities and would therefore sit outside SEC oversight, while tokenized securities would remain within the Commission’s remit. He linked the view to a token taxonomy grounded in the Howey test and noted that non‑securities tokens could fall under Commodity Futures Trading Commission or state frameworks. Atkins also pointed to the SEC’s “Project Crypto” work on tailored exemptions and safe harbors for compliant offerings.