SEC Commissioner Hester Pierce Pushes Back Against Crypto Surveillance Rules

Speaking at the Science of Blockchain Conference on August 4, she said that financial privacy should be preserved in the digital age.

Peirce stated that individuals should be free to use technologies that protect their financial privacy, and that developers who create open-source tools should not be held responsible for how those tools are later used.

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She argued that the ability to manage one's own digital assets and transfer funds privately should be treated as a basic right.

To support her point, Peirce referred to the 1990s debate over encryption. At that time, the US government tried to limit access to strong cryptography, claiming national security risks.

However, after legal battles and public pressure from figures like Phil Zimmermann, the creator of Pretty Good Privacy (PGP) encryption software, the courts sided with privacy advocates.

Peirce suggested that privacy tools for digital assets are facing a similar challenge. She warned that holding software developers accountable for users' actions could discourage innovation and slow down progress.

According to her, requiring open-source protocols to meet surveillance rules would be pointless, especially when those protocols are decentralized and cannot be changed once launched.

Peirce also argued that peer-to-peer systems should stay open and accessible, even if that means some people will use them improperly.

The SEC recently introduced a plan called Project Crypto, aimed at updating how digital assets are regulated in the US. What does the plan include? Read the full story.