Peirce’s farewell: catch criminals with less data
Outgoing SEC Commissioner Hester Peirce used her final days at the agency to argue that crypto regulation should collect less personal information, not more, and that privacy-preserving technology can help regulators catch criminals anyway. Her resignation, announced in a post on X containing her resignation letter, takes effect Oct. 2.
Speaking Sept. 23 at the Securities Industry and Financial Markets Association’s Digital Assets Conference in New York, Peirce said regulators should rethink financial monitoring. Piling up data on law-abiding customers does not help find criminals, she argued: bigger “haystacks” make the needles harder to find, and every stored data point raises the risk of leaks or misuse.
The alternative she described rests on cryptography. Zero-knowledge proofs and attribute-based credentials can confirm facts such as a person’s age, accredited-investor status or absence from sanctions lists without revealing the underlying personal data. She also urged the SEC to let firms rely on identity checks already performed by other regulated institutions instead of collecting and storing the same sensitive information over and over.
“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,” she said, in remarks published on the SEC’s site.
She criticized a regulatory mindset fixated on “data go up,” comparing it to crypto enthusiasts’ obsession with rising prices. The speech, titled “Looking for Change in Haystacks,” is her personal argument as a commissioner, not SEC policy, and it lands as the agency pivots from enforcement toward formal rulemaking.
Peirce’s exit removes the SEC’s most prominent crypto-friendly voice. Appointed by President Donald Trump, she took her seat Jan. 11, 2018 and led the agency’s Crypto Task Force from 2025. She will join Regent University School of Law as an associate professor in November, teaching securities regulation and digital assets. When she leaves Oct. 2, the SEC drops to two seated commissioners, Chairman Paul Atkins and Commissioner Mark Uyeda, its bare minimum for a quorum.
In her resignation letter she called serving at the agency “the honor of my professional lifetime.”
“I leave this position confident that under the excellent leadership of Chairman Paul Atkins and Commissioner Mark Uyeda, the talented men and women of the Securities and Exchange Commission will continue to achieve that balance,” the letter read.
