SEC’s Hester Peirce wants to end crypto’s KYC honeypots before stablecoin rules create more of them
SEC Commissioner Hester Peirce urged financial firms and regulators to reduce repeated collection and storage of customer identity data by using reusable, privacy-preserving digital credentials. The proposal comes after breaches and disclosure incidents at Coinbase and Revolut exposed identity documents and other sensitive customer information. Meanwhile, proposed rules implementing the GENIUS Act would require permitted stablecoin issuers to collect specified identifying details and retain records, though they may use some digital verification tools or rely on other institutions’ checks. FinCEN and banking agencies are seeking input on verifiable credentials, leaving the final rules to determine whether firms can verify required attributes without retaining duplicate copies of underlying documents.
