SEC's Hester Peirce Calls for Less Data Collection in Crypto Rules

Peirce says regulators should collect less, not more, personal data

Outgoing Securities and Exchange Commission Commissioner Hester Peirce said regulators should rethink how they monitor the financial system and should push for less personal data collection, not more.

She made the comments in a speech Wednesday at SIFMA's Digital Assets Conference in New York. The speech focused on digital identity systems and decentralized networks. Peirce, who is set to leave the SEC in November, took aim at know-your-customer and anti-money-laundering rules. Those rules require financial firms to check who their customers are and to watch for illegal money flows.

What she said about data and surveillance

Peirce described the current approach as a choice between two paths.

"Today society is at a crossroads," she said. "Down one path lies the status quo: more data collection, more intermediary surveillance, more 'know your customer' requirements that turn our financial rails into a panopticon."

"Down the other path lies an opportunity to use new technologies to improve our ability to catch criminals while collecting less personal information than ever before, and monitoring more sparingly to protect Americans' privacy."

She argued that collecting more and more data on law-abiding customers in order to find criminals does not work. In her view, larger collections of data make the useful clues harder to find, and every stored data point raises the risk of leaks or misuse. She criticized a regulatory mindset she described as "data go up," comparing it to crypto enthusiasts' focus on rising prices.

The privacy tools she pointed to

Peirce pointed to cryptographic tools such as zero-knowledge proofs and attribute-based credentials. These tools can confirm facts — such as a person's age, accredited-investor status, or absence from sanctions lists — without revealing the underlying personal details.

She also urged the SEC to let firms rely on identity checks that other regulated institutions have already carried out, instead of making every firm collect and store the same sensitive information.

Context on the SEC and crypto

Under President Joe Biden, the SEC was tough on the crypto space. Its Biden-appointed former Chair Gary Gensler frequently sued major crypto companies for allegedly selling unregistered securities.

Peirce was appointed to lead the Crypto Task Force in 2025. The regulator has taken a far more friendly approach to watchdogging the space since Donald Trump became president again. Regulators now say they want to create clear rules for the fast-moving industry, even though landmark legislation, the Clarity Act, was blocked last week.

Despite her "crypto mom" nickname, Peirce has previously said she would not describe herself as an advocate of the industry, but rather a "freedom maximalist."

What is confirmed

Peirce gave the speech Wednesday at SIFMA's Digital Assets Conference in New York, and the SEC published her remarks. She is an SEC Commissioner and is set to leave the agency in November. She was appointed to lead the Crypto Task Force in 2025. Her remarks on data collection, zero-knowledge proofs, attribute-based credentials, and reusing identity checks performed by other regulated institutions are on the record.

What is still unclear

The source material does not say whether the SEC has adopted any of the ideas Peirce raised, whether other commissioners support them, or what specific rule changes, if any, are planned. It also does not give an exact date for her departure beyond November.

Why this matters

Know-your-customer and anti-money-laundering rules shape how crypto exchanges, brokers, and other firms handle customer information. Peirce's call for collecting less personal data goes against the trend of gathering more, and her comments come as U.S. regulators work on new crypto rules.

Sources

• Bitcoin Magazine