Crypto executives on Monday pushed the U.S. Securities and Exchange Commission to reconsider its approach to blockchain privacy, arguing that not all users of the tools are criminals.
The meeting, the SEC’s sixth crypto-focused roundtable this year, sparked in-depth discussions among regulators and industry representatives on how privacy, identity verification and stablecoin adoption intersect.
SEC Chairman Paul Atkins opened the session with a warning: mishandling privacy could turn crypto into “the most powerful financial surveillance architecture ever invented.”
He warned that treating every wallet like a broker or every protocol like an exchange could create a system in which every transaction is monitored.
Presumption of Good Intent for Blockchain Privacy Users
Katherine Kirkpatrick Bos, general counsel at StarkWare, told reporters that regulators should not assume that users of privacy tools are primarily involved in wrongdoing. “Why does someone have to prove they are compliant upfront? » she asked.
“Instead, shouldn’t the starting point be that they use it for legitimate purposes until proven otherwise?” She added that criminal use exists, but a balance is needed to avoid unfair suspicion.
More highlights from @SECGov Crypto Working Group Roundtable on Financial Privacy and Surveillance
Three powerful voices defended crypto privacy at the SEC roundtable:
JW Verret @theblockprof (George Mason Law) dropped a legal bomb: he cannot find legal status… pic.twitter.com/jtSkFaltRK
– Paul Brigner 🛡️ (@paulbrigner) December 15, 2025
On Blockchain, AML and KYC rules
The discussion also looked at anti-money laundering (AML) and know your customer (KYC) rules. Kirkpatrick Bos criticized current practices, pointing out that photo IDs can be forged in seconds.
She suggested that cryptography-based tools could verify identity without exposing unnecessary personal information, such as home addresses, while still preventing fraud. Projects like Sam Altman’s World are already testing cryptographic keys that prove users are human without revealing private data.
BTCUSD trading at $86,354 on the 24-hour chart: TradingView
Wayne Chang, CEO of SpruceID, said that privacy is a growing demand among stablecoin users. Reports indicate that millions of dollars in stablecoins could be transferred on-chain if privacy features are available.
A certain percentage of users will want transactions to remain private, Chang said. Privacy can drive adoption of stablecoins that have not fully migrated to on-chain systems, he said.
Atkins noted that blockchain and privacy tools have legitimate uses, including helping companies execute transactions without notifying competitors. Striking a balance between public safety and privacy is essential, the SEC chief said.
SEC Commissioner Hester Peirce addresses the meeting on Monday. Source: SEC
SEC Commissioner Hester Peirce, who leads the agency’s crypto task force, opened the panel alongside Atkins and Commissioner Mark Uyeda, discussing how regulators could protect investors while respecting privacy as blockchain financial activity grows.
Blockchain: persistent tensions in the spotlight
Industry experts said the roundtable did not result in immediate policy changes, but it highlighted lingering tensions.
Regulators weigh the benefits of privacy against the risks of misuse, while market participants push for protections that could influence adoption and growth.
According to reports, these conversations are likely to continue as technology evolves and the use of cryptography becomes more common.
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