In Her Final Weeks, SEC's Peirce Calls for Ending the KYC 'Panopticon'

What happened

She said the KYC/AML regime builds "ever bigger data haystacks" that make needles harder to find, and warned against "data maximalists" who assume more collection is always better. She argued that technology now offers a better path.

In one of her final speeches as commissioner, Peirce argued that regulators' "data haystacks" endanger the people they aim to protect—as recent KYC leaks expose crypto holders to phishing (messages that impersonate someone to obtain passwords or money) and physical attacks. The pitch lands amid recent KYC leaks: Revolut exposing passports and Bitcoin histories, Trezor's vendor breaches—that heighten "wrench attack" fears.

It’s the same technology that underpins private cryptocurrency networks and assets, such as Zcash . A proof can tell a counterparty a person qualifies "without that counterparty knowing your name, income, or address," Peirce said, calling for a regulatory framework that encourages such attribute-based verification.

The remarks land against a grim backdrop of KYC data itself becoming a liability. Such leaks have heightened fears of "wrench attacks," in which criminals physically target crypto holders whose wealth and identities are exposed. It's a theme Peirce has pressed before, including at an August 2025 blockchain conference .