Hester Peirce: Crypto Privacy Must Be "Zealously" Defended

• SEC Commissioner Hester Peirce champions financial privacy and ties advocacy to constitutional values.
• Speech emphasizes self-custody and defending privacy-enhancing technologies amid regulatory scrutiny.

On May 9, 2025, U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce underscored the urgent need to defend financial privacy within the cryptocurrency sector. Addressing a blockchain conference, she emphasized the importance of individuals’ rights to self-custody digital assets and conduct private transactions. She linked her stance to the Fourth Amendment's protection against unreasonable government searches.

Peirce strongly criticized regulatory actions that compromise financial privacy, including efforts aimed at restricting technologies like crypto mixers. She acknowledged the need to tackle criminal misuse but argued that undermining the privacy of legitimate users is a disproportionate response. At the same time, she warned against policies that could erode fundamental freedoms in the financial landscape.

Her speech arrives amidst intensifying regulatory focus on the cryptocurrency industry. The SEC recently introduced “Project GARFINKEL,” an enforcement initiative aimed at investigating and prosecuting crypto-related crimes. This project seeks to tackle criminal activities like fraud and market manipulation. It reflects the SEC's intent to strengthen its enforcement actions in the crypto space.

Peirce’s remarks align with the high-profile trial of Roman Storm, co-founder of Tornado Cash, a privacy-focused crypto mixer. Storm faces allegations of facilitating over $1 billion in illicit transactions through the service. This case has sparked broader debates about the role and regulation of privacy-oriented technologies. Peirce indirectly addressed these implications, advocating for nuanced approaches that preserve legitimate privacy rights while addressing misuse.

The crypto community welcomed Peirce’s stance, with advocates praising her defense of privacy rights. Her comments are seen as a critical counterbalance to policies that could stifle innovation and compromise constitutionally rooted freedoms.