SEC commissioner Hester Peirce defends crypto privacy and open-source development

US SEC Commissioner Hester Peirce has defended the right to financial privacy and open-source development, arguing that crypto users should be able to transact privately and developers should not be punished for how their code is used. During her speech at the Science of Blockchain Conference that concluded on August 4, Peirce criticised increasing regulatory pressure on decentralised technologies. She warned that recent actions targeting software developers risk undermining the foundational principles of privacy, innovation, and neutrality in code design. Developers should not be held responsible According to Peirce, developers of open-source privacy protocols should not be held responsible for the illicit use of their software. She argued that the right to self-custody and privacy-enhancing tools must be protected, adding that mandating surveillance of open-source infrastructure would be “fruitless” because such protocols, once deployed, are immutable and globally accessible. She cited the history of strong encryption, recalling how developers like Phil Zimmermann helped defend private cryptography against government overreach in the 1990s. “Because of their hard-fought victory,” she said, society today depends on encryption for basic digital activities like email, banking, and communication. Peirce suggested that privacy-preserving crypto tools deserve similar protection and recognition as public goods. Her comments come as the trial of Roman Storm , co-founder of the crypto mixing protocol Tornado Cash, moves toward a verdict. Storm faces charges of conspiracy to commit money laundering, violating US sanctions, and operating an unlicensed money-transmitting business. If convicted, he could serve up to 40 years in prison. Storm’s defence argues that Tornado Cash functions as a non-custodial, autonomous software protocol and that developers like him do not control how users interact with it. People have the right to transact privately Peirce didn’t shy away from criticising attempts to restrict financial privacy tools. She warned that requiring intermediaries to monitor peer-to-peer activity, as nearly mandated by the now-defunct DeFi broker rule, would turn businesses into surveillance agents. Such a move, she said, would be “antithetical to a free society.” The DeFi broker rule, proposed under the Biden administration and struck down by President Trump in April, would have forced DeFi protocols to disclose user data and report gross proceeds to the IRS. She maintained that regulators should not compel businesses to track who their customers transact with. Instead, she urged lawmakers to respect the original vision of decentralised protocols as open, neutral infrastructure. Technologies with legitimate uses, she said, should remain “available for all to use,” even if some individuals choose to exploit them for illegal purposes. “Safeguarding our families, communities, and country from harm is extremely important, but curtailing financial privacy and impeding disintermediating technologies are the wrong approach,” Pierce said. Denying people financial privacy—whether through sweeping surveillance programs or restrictions on privacy-protecting technologies—undermines the fabric and freedoms of our families, communities, and nation. The post SEC commissioner Hester Peirce defends crypto privacy and open-source development appeared first on Invezz

Source: Invezz