In Her Final Weeks, SEC's Peirce Calls for Ending the KYC 'Panopticon'
Hester Peirce argued that financial regulation should reduce, not expand, the personal data collected for KYC and AML compliance. She said the current model creates large, hackable data stores and assumes that gathering more information on more people improves crime detection. As an alternative, she promoted zero-knowledge proofs, which can verify that someone meets a requirement without revealing sensitive details like name, income, or address. She called for rules that support attribute-based verification and third-party identity checks instead of forcing each institution to copy and store the same records. Her remarks came as recent breaches and fraud incidents have shown how KYC data can be misused, and as she nears the end of her SEC tenure.
