In a speech at the Science of Blockchain Conference, U.S. Securities and Exchange Commission Commissioner Hester M. Peirce argued that disintermediating technologies can enhance confidentiality and that policymakers should reassess U.S. financial surveillance practices that rely on the presence of intermediaries and the third-party doctrine. She framed the remarks as her personal views, not those of the SEC or other Commissioners. Peirce pointed to the Bank Secrecy Act (BSA) as a central driver of large-scale reporting and information sharing, highlighting requirements such as Suspicious Activity Reports and Currency Transaction Reports for currency transactions over USD 10,000, as well as customer identity verification at account opening for certain institutions. She cited fiscal year 2024 figures showing around 324,000 financial institutions submitted more than 25 million transaction reports, including 4.7 million Suspicious Activity Reports and 20.5 million Currency Transaction Reports, and criticized “when-in-doubt-file” dynamics that can lead to costly, low-signal reporting. The speech also flagged questions about the usefulness and proportionality of BSA data collection, referenced a Government Accountability Office finding that many Currency Transaction Reports are not used, and noted the Department of the Treasury’s stated intention to delay the effective date and revisit the substance of a recently adopted anti-money laundering rule for investment advisers. Beyond the BSA, she raised investor privacy concerns with the SEC’s Consolidated Audit Trail, describing it as a system that enables broad review of customer trading activity without suspicion of wrongdoing, and referenced the SEC’s earlier decision to stop requiring brokers to report customers’ names, addresses, and birth years to the system, alongside the SEC Chair’s call for a review of the Consolidated Audit Trail’s reporting requirements and collection scope. Peirce advocated protecting access to privacy tools such as encryption and zero-knowledge proofs, supporting self-custody of crypto assets, and avoiding approaches that would deputize peer-to-peer users or open-source developers to collect and report information, while urging the development of a regulatory path for on-chain software systems that do not require operation by a central intermediary.
U.S. Securities & Exchange Commission 2025-08-04
U.S. Securities and Exchange Commission Commissioner Peirce calls for scaling back warrantless financial surveillance and safeguarding privacy technologies
SEC Commissioner Hester M. Peirce, at the Science of Blockchain Conference, urged reassessing U.S. financial surveillance and enhancing confidentiality via disintermediating technologies. She criticized the Bank Secrecy Act's reporting requirements, questioned its data collection usefulness, and raised privacy concerns about the SEC’s Consolidated Audit Trail. Peirce supported privacy tools like encryption and zero-knowledge proofs, advocating for a regulatory framework for on-chain software systems without central intermediaries.