SEC's Peirce defends crypto privacy rights as Tornado Cash developer Storm awaits verdict amid prosecutorial evidence problems and Fourth Amendment erosion concerns.

SEC Commissioner Hester Peirce delivered a forceful defense of financial privacy rights on August 4, arguing that Americans should retain the ability to use privacy-protecting crypto technologies without government surveillance.

Her remarks at Stanford’s Science of Blockchain Conference come as Tornado Cash co-founder Roman Storm faces criminal trial for allegedly facilitating $1 billion in illicit transactions through the sanctioned crypto mixer.

Fourth Amendment Protections Eroded by Third-Party Financial Surveillance

Peirce criticized the Bank Secrecy Act’s 55-year-old framework that deputizes financial institutions as “de facto law enforcement investigators,” requiring them to file over 25 million transaction reports annually, including 4.7 million suspicious activity reports.

She argued the third-party doctrine strips Americans of Fourth Amendment protections when they interact with financial intermediaries.

The Commissioner advocated for zero-knowledge proofs, encrypted networks, and decentralized technologies that eliminate intermediaries from financial transactions.