SEC Commissioner Hester Peirce proposed replacing current KYC and AML data collection methods with zero-knowledge proofs (ZKPs). Speaking at the SIFMA Digital Assets Conference on September 23, she argued that traditional practices create massive, vulnerable databases that complicate law enforcement efforts and threaten user privacy.
Peirce advocates for attribute-based verification, where cryptographic math confirms specific statuses—such as age or accreditation—without exposing sensitive personal information like names or addresses. She suggested that this model keeps data under user control while utilizing public blockchains for transparent, tamper-resistant record-keeping.
The commissioner also encouraged regulators to adopt frameworks that rely on third-party identity services. Under this approach, trusted entities would issue cryptographic attestations, allowing users to verify their credentials across multiple platforms without financial institutions needing to store full identity profiles independently.
Peirce has served as an SEC Commissioner since 2018. Her recent remarks serve as a policy signal rather than a formal rulemaking proposal. No official guidelines were introduced, and the speech did not reference specific crypto tokens, focusing instead on infrastructure and compliance standards.
