Hester Peirce Wants Zero-Knowledge Proofs to Shrink Crypto’s KYC Data Honeypots

By Isaac • September 25, 2026 7:23 pm •

Crypto’s privacy problem starts with companies collecting sensitive customer data. The same people are then asked to hand over that data again and again, creating more databases for criminals to target.

SEC Commissioner Hester Peirce says modern cryptography offers a better way.

In remarks at SIFMA’s Digital Assets Conference, Peirce argued that financial firms should be able to verify specific compliance facts without automatically collecting and storing the raw personal information behind them. The tools she highlighted include attribute-based credentials and zero-knowledge proofs.

In her official SEC remarks, Peirce described a system in which a credential could confirm that a customer is old enough, is a U.S. citizen, qualifies as an accredited investor, or is absent