Hester Peirce, a commissioner at the US Securities and Exchange Commission (SEC), is urging lawmakers to protect the privacy rights of crypto users and open-source developers. Her call comes just before a crucial court decision in the case against the co-founder of Tornado Cash.
The Case for Crypto Privacy
Peirce strongly believes US authorities should embrace privacy-enhancing technologies and uphold the right of individuals to manage their own digital assets. Speaking at the Science of Blockchain Conference, she emphasized the need for concrete steps to protect people’s ability to transact privately and develop privacy software without fear of legal repercussions.
She pointed out that a recent government report recommended that Americans should be free to use blockchain technology and own digital assets for legitimate purposes. It also suggested that developers should have the freedom and clear regulations to build with this technology. Peirce argued that forcing open-source protocols to comply with surveillance measures is pointless, as anyone can use them. She also stated that developers shouldn’t be held responsible for how others use their software. This aligns with SEC Chair Paul Atkins’ call for a regulatory path that allows developers to create decentralized software without needing a central authority.
Peirce also criticized the idea of businesses being forced to snitch on each other, calling it a violation of a free society. She also opposes intermediaries being forced into peer-to-peer transactions. It’s worth noting that the US government recently dropped a controversial rule that would have forced decentralized exchanges to act like brokers and report user transaction details.
The Tornado Cash Trial: A Precedent in the Making
Peirce’s comments come ahead of the verdict in the trial of the Tornado Cash co-founder. Many believe that holding developers criminally liable for how others use their code would stifle innovation in the US.
The Treasury Department sanctioned Tornado Cash in 2022 for allegedly facilitating money laundering. Its co-founder, Roman Storm, was arrested and charged with various offenses, potentially facing a 45-year prison sentence. The outcome of this trial will set a significant precedent for the future of open-source development in the crypto space.
