{ "id": 57291, "date": "2025-12-16T11:30:59", "date_gmt": "2025-12-16T04:30:59", "guid": { "rendered": "https:\/\/hbbgroup.net\/crypto-urges-sec-to-see-the-good-in-blockchain-privacy-tools\/" }, "modified": "2025-12-16T11:30:59", "modified_gmt": "2025-12-16T04:30:59", "slug": "crypto-urges-sec-to-see-the-good-in-blockchain-privacy-tools", "status": "publish", "type": "post", "link": "https:\/\/hbbgroup.net\/en_us\/crypto-urges-sec-to-see-the-good-in-blockchain-privacy-tools\/", "title": { "rendered": "Crypto urges SEC to see the good in blockchain privacy tools" }, "content": { "rendered": "
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Crypto industry executives have urged the US Securities and Exchange Commission to shift its thinking on blockchain privacy tools, pitching that there are legitimate applications for them outside of criminal use.<\/p>\n

The SEC hosted crypto and finance executives for a discussion and panel on financial surveillance and privacy<\/a> on Monday, the agency\u2019s sixth crypto-focused roundtable this year, as it seeks to overhaul its approach to crypto.<\/p>\n

StarkWare general counsel Katherine Kirkpatrick Bos, who participated in a panel discussion, told Cointelegraph after the event that a major takeaway was that there shouldn\u2019t be an assumption that those using and creating privacy tools are \u201coverwhelmed by wrongdoers.\u201d<\/p>\n

\u201cWhy is the assumption that an individual needs to affirmatively prove that they are compliant or they\u2019re using the tool for good?\u201d<\/p><\/blockquote>\n

\u201cAs opposed to it being the other way around, where the assumption is that this individual is using the tool for good until there is some sort of indication that they\u2019re using it for bad,\u201d she said.<\/p>\n

Kirkpatrick Bos added that \u201cof course, wrongdoers were using, or are using those tools, but there needs to be a balance.\u201d<\/p>\n

Katherine Kirkpatrick Bos (left) discussing financial privacy at an SEC roundtable on Monday. Source: <\/em>Paul Brigner<\/em><\/a><\/figcaption><\/figure>\n

During the roundtable, Wayne Chang, the founder and CEO of the credential management company SpruceID, said some percentage of users of stablecoins<\/a>, a crypto tool that is slowly becoming mainstream, will want privacy.<\/p>\n

\u201cThere are a ton of stablecoins that aren\u2019t onchain yet that would come onchain if there is privacy,\u201d he said. \u201cWe\u2019re going to see an increase in demand for privacy-preserving blockchains.\u201d\u00a0<\/p>\n

\u201cMy hope is that regulators continue to engage industry, and we can have those discussions on how to keep privacy for folks while also having tools that are useful,\u201d Chang said.<\/p>\n

Customer checks are becoming outdated<\/h2>\n

Kirkpatrick Bos said a discussion on Know Your Customer (KYC<\/a>) and Anti-Money Laundering (AML) measures focused on whether current rules are sufficient in the age of artificial intelligence<\/a>.<\/p>\n

\u201cThe question arose and was debated on the panel, well, what is necessary for Anti-Money Laundering?\u201d she said. \u201cNow we have AI. It\u2019s made manual, AML and KYC antiquated. How do we solve for that?\u201d<\/p>\n

\u201cThere was a sense that the current system of AML and KYC is antiquated, it\u2019s problematic, it\u2019s ineffective,\u201d she added. \u201cBut there needs to be some sort of check when it\u2019s a centralized entity facilitating flows of money to ensure that they\u2019re not helping wrongdoers.\u201d<\/p>\n

Many financial institutions request a picture of a user\u2019s driver\u2019s license for its KYC checks, which Kirkpatrick Bos said was \u201cabsurd, because an individual can go on the internet and develop a fake driver\u2019s license in a matter of seconds.\u201d<\/p>\n

\u201cSo the question is, can cryptography-based tools improve that and make it harder for bad guys to do that? But can they also do that and make it harder for bad guys while preserving an individual\u2019s privacy and not revealing data like an address, where it is not necessary to vet the legality of the funds?\u201d she added.<\/p>\n

Some projects have begun to test crypto-based solutions for proving identity while claiming to preserve privacy<\/a>, such as Sam Altman\u2019s World, which gives users a cryptographic key they can use to prove they\u2019re human.<\/p>\n

SEC\u2019s Atkins warns of potential for crypto mass surveillance<\/h2>\n

SEC chair Paul Atkins had given opening remarks<\/a> at the roundtable, warning that if \u201cpushed in the wrong direction, crypto could become the most powerful financial surveillance architecture ever invented.\u201d<\/p>\n