SEC Urged to See Valid Uses of Crypto Privacy Tools
Crypto industry executives have urged the US SEC to reconsider its stance on blockchain privacy tools, arguing these technologies have legitimate, non-criminal uses. At the SEC’s sixth crypto roundtable of 2024, industry participants emphasized that privacy tools should not automatically be viewed with suspicion, advocating for a presumption of legitimate intent unless evidence suggests misuse. Executives noted growing demand for privacy-preserving blockchain features, especially as stablecoins become more mainstream. They argued current Know Your Customer (KYC) and Anti-Money Laundering (AML) methods are outdated, particularly in the age of AI, and called for cryptography-based solutions to improve both compliance and privacy. Examples cited include digital identity tools that verify users without exposing unnecessary personal data. SEC Chair Paul Atkins warned that excessive regulation could turn crypto networks into mass surveillance systems, but noted that privacy-preserving blockchain technologies also offer unique protections not possible in traditional finance. Both sides agreed on the need to balance regulatory checks with individual privacy rights.
