SEC’s Hester Peirce Champions Crypto Privacy in Fiery Tornado Cash Trial Showdown

SEC Commissioner Hester Peirce just dropped a bombshell in the crypto privacy debate—right as Tornado Cash's legal battle reaches boiling point.

The 'Crypto Mom' isn't playing defense anymore. She's gone full offensive, framing privacy tools as fundamental rights while regulators scramble to contain the fallout.

Meanwhile, Wall Street banks quietly move billions through opaque offshore vehicles—but sure, let's vilify open-source code. The irony writes itself.

Tornado Cash trial debates developer liability 

Peirce’s remarks come as Roman Storm, co-founder of crypto mixing service Tornado Cash, awaits a verdict in the Southern District of New York. 

Storm is accused of enabling money laundering through the service, though his defense team maintains that the tool is neutral and not inherently illegal.

The Commissioner compared the case to the 1990s battle over cryptography, when engineers like Phil Zimmermann fought for strong encryption for everyone. She points out that these early victories were crucial to the success of the internet, but reminds us that they still inform our modern fight for privacy rights.

SEC Commissioner warns against undermining civil liberties  

Peirce also criticized the now-defunct DeFi broker rule, which WOULD have required decentralized platforms to collect and report user data to the IRS. “Doing so would deputize us to surveil our neighbors—a practice antithetical to a free society,” she said.

Like the internet, she maintained that blockchain-based technologies with legitimate uses must remain openly accessible—even if some bad actors misuse them—because restricting them risks infringing on fundamental freedoms.

The Tornado Cash trial may establish a crucial legal precedent for courts’ interpretation of developer liability in the crypto space.

In a related case, Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill have indicated their intention to plead guilty to charges linked to their crypto mixing service.

Documents filed in a New York federal court on Thursday indicated that Rodriguez and Hill both intend to enter guilty pleas on Wednesday morning. In April 2024, the two had entered their original not guilty plea in connection with allegations they operated an unlicensed money transmitting business that processed over $2 billion of illegal financial transactions— some linked to darknet marketplaces like Silk Road. 

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