Crypto and Privacy: Hester Peirce, dubbed 'Crypto Mom', fights her last battle at the SEC

Final plea for the "Crypto Mom". Hester Peirce will leave the Securities and Exchange Commission (SEC) on October 2, after nearly ten years with the U.S. regulator. Before joining the faculty of Regent University School of Law, the Republican commissioner makes one last stand for her priorities: protecting developers, distinguishing truly decentralized protocols from intermediaries, and reducing financial surveillance through cryptographic tools.
Key points of this article:

• Hester Peirce is leaving the SEC after advocating for clearer regulation of digital assets for nearly ten years
• Her departure leaves Paul Atkins and Mark Uyeda, both Republicans, as the only commissioners at the head of the agency

Hester Peirce leaves the SEC with several unfinished crypto projects

Hester Peirce has navigated the presidencies of Jay Clayton, Gary Gensler, and Paul Atkins while maintaining a relatively consistent stance. Dubbed "Crypto Mom", she has regularly criticized the lawsuits against companies accused of failing to register while the applicable rules remained, in her view, insufficiently defined.

Since the leadership change in 2025, the SEC has adopted a more favorable approach to developing specific rules. Hester Peirce has notably led the Crypto Task Force and supported clarifications regarding staking. The agency has also published its "Regulation Crypto Assets" framework and a temporary exemption allowing, under certain limits, the trading of tokenized securities on crypto networks via automated market makers.

This exemption is set to last five years and serve as a transition to a permanent framework. However, the outgoing commissioner believes that several issues remain open, particularly asset custody by investment advisers, rules applicable to transfer agents, and legal protection for developers.

On this last topic, she advocates for a distinction between direct participation in illegal activity and merely creating a tool. A developer should not, in her view, be held automatically liable for acts committed by users of their software. Nevertheless, she calls on projects that retain operational or financial control not to artificially present themselves as decentralized.
Hester Peirce leaves the SEC, the time for a first assessment has come -- Source: Compte X

ZK proofs to ease KYC checks and protect data

Her other priority concerns financial surveillance. KYC and anti-money laundering procedures currently require institutions to collect and retain the names, addresses, dates of birth, identification documents, and financial information of their clients. Each new intermediary often repeats the same checks, multiplying sensitive databases, compliance costs, and potential consequences of a data breach.

Hester Peirce proposes to replace part of this accumulation with attribute-based proofs. A person could prove that they meet the required age, reside in an authorized jurisdiction, have qualified investor status, or are not on a sanctions list without transmitting all the information used to establish these facts.

Zero-knowledge proofs allow precisely for confirming that a condition is met without revealing the underlying data. An institution would thus obtain a verifiable response to its regulatory obligation without necessarily knowing the client's name, income, or address.

She also wants to facilitate the use of already regulated identity providers. A verification performed by a trusted actor could be reused by multiple institutions instead of being repeated for each account opening. She sees significant potential savings for the financial sector, but also a way to reduce the risks associated with repeated storage of the same data.

Her departure leaves the SEC with two Republican commissioners, while its board can have up to five members. The implementation of these proposals now depends on an agency engaged in a revamp of its crypto rules, but still incomplete on the institutional level.

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