SEC’s Peirce Drops Truth Bomb: Govt Must Shield Crypto Privacy—Not Strangle It

Crypto's privacy wars just got a regulator in their corner—and she's packing heat.

SEC Commissioner Hester Peirce fired a shot across the bow of overzealous regulators this week, arguing that protecting financial privacy should be the government's job—not dismantling it. In a climate where surveillance masquerades as security, her stance cuts through the bureaucratic fog like a Bitcoin whitepaper in 2008.

The irony? Wall Street still uses fax machines.

Peirce's argument hinges on a radical premise: that citizens might actually deserve sovereignty over their transaction histories. Imagine that—a financial system where you don't need to beg permission to move your own money. The crypto crowd's been screaming this for years, but hearing it from inside the SEC's marble halls? That's the regulatory equivalent of a double-spend attack on the status quo.

Of course, the usual suspects will howl about 'risks' and 'consumer protection'—the same tired script they've used to justify every financial surveillance power grab since 9/11. Never mind that your neighborhood bank sells your data to every third-party advertiser with a checkbook.

Here's the brutal truth: privacy isn't the enemy of sound regulation—it's the foundation. When governments forget that, they don't get to act shocked when citizens flock to Monero.

Wake up call: If the SEC's most crypto-savvy commissioner is sounding more punk rock than your local anarcho-capitalist meetup, maybe—just maybe—the system's more broken than we thought.

A Surveillance State

The current financial system is a surveillance state. In 2024, 324,000 financial institutions filed more than 25 million transaction reports, including 4.7 million “Suspicious Activity Reports.”

Meanwhile, third-party doctrine allows the government to access financial data without warrants, and the SEC’s Consolidated Audit Trail (CAT) tracks every investor’s trading activity without suspicion of wrongdoing.

Privacy-protecting crypto technologies such as zero-knowledge proofs, mixers, and privacy pools can reduce reliance on intermediaries while DeFi protocols offer transparent, equal access without discrimination, she said.

“A bank that might not want to lend to certain types of people gives way to a DeFi protocol through which everybody can borrow on the same, publicly transparent terms.”

Grateful to SEC Commissioner @HesterPeirce for spotlighting the need to defend Americans’ right to financial privacy and including @katie_haun‘s argument that our financial data is among the most sensitive personal information we produce.

This is an issue too often overlooked… pic.twitter.com/7N7IPU5fWf

— Haun Ventures (@HaunVentures) August 4, 2025

Peirce made several policy recommendations to protect Americans’ right to self-custody crypto assets, not to prosecute open-source privacy software developers, and to avoid requiring intermediaries in peer-to-peer transactions.

“We should not ask peers transacting with one another, where no intermediary exists, to collect and report information on each other. Doing so WOULD deputize us to surveil our neighbors—a practice antithetical to a free society.”

SEC Launches ‘Project Crypto’

“We will make sure the next chapter of financial innovation is written right here in America,” SEC chair Paul Atkins said on Monday.

The comments came as Atkins unveiled ‘Project Crypto,’ a broad initiative to modernize the country’s outdated securities rules “to enable America’s financial markets to MOVE on-chain.”

Atkins said the SEC will review and potentially repeal “outdated rules” that are no longer applicable to the crypto sector, in order to support the development of tokenized assets and emerging financial models.

We will make sure the next chapter of financial innovation is written right here in America.

Watch highlights from my speech launching Project Crypto at @A1Policy. pic.twitter.com/euqY9samPt

— Paul Atkins (@SECPaulSAtkins) August 4, 2025

Meanwhile, the WHITE House is also preparing an executive order that will punish banks that block crypto investors and companies, reversing Biden-era discrimination.