Sasha why NOT
--
Crypto Industry to SEC: Why Blockchain Privacy Tools Are Not a Crime
On Monday, the U.S. Securities and Exchange Commission (SEC) held its sixth cryptocurrency-focused event this year. This time, the key topic was blockchain privacy—an issue long shadowed by regulatory suspicion. But it seems the dialogue is beginning to shift.
Regulators Are Starting to Listen
SEC Chairman Paul Atkins made an important statement: the agency must find a way to allow people to use blockchain privacy tools "without immediately falling under suspicion." This is a signal: regulators are beginning to recognize that privacy is not synonymous with illegal activity.
The crypto industry actively picked up on this idea. Roundtable participants, including executives from StarkWare and SpruceID, insisted: legitimate uses of privacy tools extend far beyond potential criminal misuse.
"Why is it assumed that a person must affirmatively prove they are using a tool for good? Why not the opposite—that it is used for good until there is a sign otherwise?" questioned Catherine Kirkpatrick Bos, Chief Legal Officer of StarkWare.
Privacy Is a Growth Driver, Not a Threat
Wayne Chang, founder of SpruceID, made a compelling argument: privacy is a market demand. The mass influx of traditional assets, such as stablecoins, into blockchain is only possible with privacy guarantees.
"We will see growing demand for privacy-preserving blockchains," predicts Chang.
This is a key point: privacy is not a niche option for a select few, but a fundamental condition for the next wave of institutional and retail adoption.
Outdated Rules vs. Cryptographic Solutions
Particular attention at the roundtable was given to outdated KYC (Know Your Customer) and AML (Anti-Money Laundering) systems. Participants agreed that manual checks using driver's license photos in the age of AI and deepfakes are "absurd" and an inefficient use of resources.
Instead, a forward-looking view was proposed: cryptography can provide both security and privacy. Technologies like zero-knowledge proofs allow verification of a user's legitimacy without revealing their personal data. Projects like Sam Altman's Worldcoin are already testing such approaches.
A Warning from the SEC: Don't Turn Crypto into a Tool for Mass Surveillance
Paul Atkins also expressed an important concern: with the wrong regulatory approach, crypto could become "the most powerful financial surveillance architecture ever invented."
His words are a caution against overly rigid rules that could stifle innovation:
"If the government treats every wallet as a broker, every transaction as a reportable event, then it will turn this ecosystem into a financial panopticon."
Instead, Atkins sees potential in balance: privacy technologies can simultaneously protect societal interests and prevent real threats.
Food for Thought
The discussion has moved forward. The SEC is beginning to acknowledge that privacy is a fundamental need and a catalyst for growth, not a red flag for law enforcement.
Do you think regulators worldwide, and the SEC in particular, will be able to find that delicate balance between security, innovation, and privacy, or are we headed for an era of total blockchain surveillance?
#SEC #Blockchain #cryptocurrency
Regulators Are Starting to Listen
SEC Chairman Paul Atkins made an important statement: the agency must find a way to allow people to use blockchain privacy tools "without immediately falling under suspicion." This is a signal: regulators are beginning to recognize that privacy is not synonymous with illegal activity.
The crypto industry actively picked up on this idea. Roundtable participants, including executives from StarkWare and SpruceID, insisted: legitimate uses of privacy tools extend far beyond potential criminal misuse.
"Why is it assumed that a person must affirmatively prove they are using a tool for good? Why not the opposite—that it is used for good until there is a sign otherwise?" questioned Catherine Kirkpatrick Bos, Chief Legal Officer of StarkWare.
Privacy Is a Growth Driver, Not a Threat
Wayne Chang, founder of SpruceID, made a compelling argument: privacy is a market demand. The mass influx of traditional assets, such as stablecoins, into blockchain is only possible with privacy guarantees.
"We will see growing demand for privacy-preserving blockchains," predicts Chang.
This is a key point: privacy is not a niche option for a select few, but a fundamental condition for the next wave of institutional and retail adoption.
Outdated Rules vs. Cryptographic Solutions
Particular attention at the roundtable was given to outdated KYC (Know Your Customer) and AML (Anti-Money Laundering) systems. Participants agreed that manual checks using driver's license photos in the age of AI and deepfakes are "absurd" and an inefficient use of resources.
Instead, a forward-looking view was proposed: cryptography can provide both security and privacy. Technologies like zero-knowledge proofs allow verification of a user's legitimacy without revealing their personal data. Projects like Sam Altman's Worldcoin are already testing such approaches.
A Warning from the SEC: Don't Turn Crypto into a Tool for Mass Surveillance
Paul Atkins also expressed an important concern: with the wrong regulatory approach, crypto could become "the most powerful financial surveillance architecture ever invented."
His words are a caution against overly rigid rules that could stifle innovation:
"If the government treats every wallet as a broker, every transaction as a reportable event, then it will turn this ecosystem into a financial panopticon."
Instead, Atkins sees potential in balance: privacy technologies can simultaneously protect societal interests and prevent real threats.
Food for Thought
The discussion has moved forward. The SEC is beginning to acknowledge that privacy is a fundamental need and a catalyst for growth, not a red flag for law enforcement.
Do you think regulators worldwide, and the SEC in particular, will be able to find that delicate balance between security, innovation, and privacy, or are we headed for an era of total blockchain surveillance?
#SEC #Blockchain #cryptocurrency
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
86
0