Peirce's Parting Shot: Financial Privacy Should Be the Default

SEC Commissioner Hester Peirce has been a vocal advocate for financial privacy, and she's making her case one last time before leaving the agency. In a recent speech, she argued that financial privacy should be the default, not the exception. Peirce believes that wanting privacy shouldn't make someone look suspicious, and that financial institutions should use cryptography to protect customer data.

Peirce took aim at Know Your Customer (KYC) and Anti-Money Laundering (AML) rules, which require financial firms to verify customer identities and monitor activity. She described this data gathering as 'excessive surveillance' that does too little to protect customers.

Peirce proposed adopting privacy-preserving tools like zero-knowledge proofs, which would allow financial institutions to verify compliance without collecting sensitive customer data. This approach, she argued, would strike a balance between regulation and customer privacy.