Peirce Pushes for Less Data, More Crypto Privacy at SEC

SEC Commissioner Hester Peirce has called for a reduction in the amount of personal data collected through know-your-customer (KYC) regulations, citing that this approach is outdated and inefficient. In her final speech as an SEC commissioner before leaving office, Peirce argued that collecting vast amounts of data from individuals does not necessarily lead to identifying criminals, but rather creates larger 'data haystacks' where needles are harder to find.

'It's about building bigger and bigger data haystacks, and then hoping that we will find a needle or two in them,' Peirce said. She criticized the current approach of KYC regulations, which assumes that collecting data from a sufficient number of people would enable authorities to identify criminals among them.

Pierce suggested an alternative approach using zero-knowledge proofs and attribute-based verification, which allow for verifying compliance without disclosing personal data. This technology powers private networks like Zcash. She also proposed allowing regulators to outsource identity verification to third parties and issuing cryptographic certificates that can be moved from platform to platform.