On Monday, Crypto executives forced the U.S. Securities and Exchange Commission to reconsider its approach to the issue blockchain privacy, arguing that not all users of these tools are criminals.
The meetingThe SEC’s sixth cryptocurrency roundtable this year sparked a edged exchange between regulators and industry representatives about how privacy, identity verification and stablecoin adoption intersect.
SEC Chairman Paul Atkins opened the session with a warning: Mishandling privacy could turn cryptocurrencies into “the most powerful financial surveillance architecture ever invented.”
He cautioned that treating each wallet like a broker or each protocol like an exchange could create a system that monitors every transaction.
Presumption of Good Intentions 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 engaged in wrongdoing. “Why does someone have to immediately prove that they are complying with the regulations?” she asked.
“Instead, shouldn’t the starting point be that they use it for lawful purposes until proven otherwise?” She added that there is criminal operate, but a balance is needed to avoid unjustified suspicions.
More highlights from @SECGov Crypto Task Force Roundtable on Privacy and Financial Oversight
Three powerful voices advocated for privacy in crypto during the SEC roundtable:
JW Verret @theblockprof (George Mason Law) Dropped a Legal Bomb: Can’t Find Statutory… pic.twitter.com/jtSkFaltRK
— Paul Brigner 🛡️ (@paulbrigner) December 15, 2025
About Blockchain, AML and KYC rules
The discussion also examined anti-money laundering (AML) and Know Your Customer (KYC) policies. Kirkpatrick Bos criticized current practices, noting that photo IDs can be forged in seconds.
She suggested that cryptography-based tools could verify identities without revealing unnecessary personal information such as home addresses, while also 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 privacy is a growing demand among stablecoin users. Reports indicate that millions of dollars in stablecoins could be moved on-chain if privacy features are available.
Chang said a certain percentage of users will want to keep their transactions private. Privacy could impact the 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 complete transactions without telling competitors. The SEC chief said striking a balance between public safety and privacy is crucial.
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 roundtable with Atkins and Commissioner Mark Uyeda, discussing how regulators can protect investors while respecting privacy as blockchain-based financial activity increases.
Blockchain: constant tensions in the spotlight
Industry insiders said that round table it did not lead to immediate policy changes, but it highlighted persistent tensions.
Regulators weigh privacy benefits against abuse risks, while market participants push for safeguards that could influence adoption and development.
Reports indicate that these conversations are likely to continue as technology evolves and the operate of cryptocurrencies becomes more widespread.
Featured image from Yellow, chart from TradingView
Editorial process for bitcoinist is focused on providing thoroughly researched, correct and unbiased content. We adhere to strict sourcing standards, and each page is carefully reviewed by our team of top technology experts and experienced editors. This process ensures the integrity, relevance and value of our content to our readers.
