SEC’s Peirce defends transaction privacy as Tornado Cash verdict looms

2025-08-05 17:03:42 Primitive Reading

US Securities and Exchange Commission (SEC) Commissioner Hester Peirce told an audience of blockchain researchers and practitioners on Monday that lawmakers and regulators need to protect people’s right to transact privately.

Her comments come as Roman Storm’s Tornado Cash trial heads toward a verdict.

Peirce said in a speech at the Science of Blockchain Conference that privacy-protecting technologies and the right to self-custody crypto should be safeguarded, along with the rights of developers of open-source privacy software, who shouldn’t be held responsible for how others use their code.

“We should take concrete steps to protect people’s ability not only to communicate privately, but to transfer value privately, as they could have done with physical coins in the days in which the Fourth Amendment was crafted,” she said.

“Although a centralized intermediary or even a DAO deploying a DeFi application could build in restrictions on its use, an immutable, open-source protocol is available for anyone’s use in perpetuity, so requiring that it comply with financial surveillance measures is fruitless.”

Peirce’s comments come amid jury deliberations in the trial of Roman Storm, co-founder of the crypto mixing service Tornado Cash, which allows users to mask the origin and destination of cryptocurrency from prying eyes.

Stifling privacy technologies slows innovation

In the 1990s, governments, for national security reasons, wanted to keep strong cryptography out of private hands, according to Peirce.

She noted it took court cases and pushback from cryptographers such as Phil Zimmermann — the developer of Pretty Good Privacy (PGP) encryption software — to turn the tide, leading to many technological advancements.

“The internet could not have succeeded without strong cryptography, so a determined set of cryptographers pushed back and convinced the government that cryptography in private hands was a net positive,” she said.

“Because of their hard-fought victory in the courts and the court of public opinion, we daily rely on encryption to send email, engage in online banking, buy from online merchants, communicate with one another through voice and video, and conduct many other daily tasks.”

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