SEC’s Hester Peirce: Crypto Privacy Tools Are Lawful

SEC Commissioner Hester Peirce spoke at Georgetown Law on Wednesday, arguing that privacy-enhancing cryptographic tools are lawful components of financial infrastructure and urging developers to engage with the SEC Crypto Task Force on technologies that could support Know Your Customer and anti-money-laundering checks. A transcript of the remarks is posted on the SEC website.

Peirce argued privacy-preserving tools should not be treated primarily as instruments of crime. She said such technologies can protect ordinary users from hackers and scammers while serving legitimate financial functions.

In the transcript, Peirce wrote: “Empowering government to be able to identify, pursue, and punish the bad guys is important to the security of the nation and its people, but so too is empowering people to protect information about their lives, including their financial lives.”

She warned against treating privacy technologies as an excuse for broader government surveillance, telling the audience privacy should not be “an opportunity for the government to watch more of what its citizens do.” Peirce encouraged developers to present designs that could enable compliance checks without exposing unnecessary personal data.

Her remarks come as privacy in crypto has returned to the policy agenda. Projects such as Monero and Zcash were designed to hide transaction details and user identities. Interest in these assets has risen alongside price gains for some tokens.

Regulators are moving in various directions. The European Union is advancing anti-money-laundering rules set to take effect in 2027 that would prohibit anonymous accounts and could limit how financial institutions and crypto service providers handle privacy-preserving cryptocurrencies.

Private transaction features are also being developed for business and institutional use. Aptos introduced a privacy-focused coin aimed at letting firms move funds onchain without revealing treasury movements or payment flows. Polygon has rolled out private stablecoin payments targeted at institutional users.

Peirce noted privacy tools can reduce exposure to fraud and data exploitation while preserving user control over financial information. She urged proactive engagement between creators and regulators so innovations can be assessed for compliance and user protection.

The full transcript of Peirce’s remarks is available on the SEC’s website.