SEC’s Peirce Defends Crypto Privacy Amid Tornado Cash Trial
SEC Commissioner Hester Peirce urged regulators to protect crypto privacy and open-source developers at the Science Blockchain Conference. She asserted that privacy tools like Tornado Cash should not impose liability for users’ illicit actions and compared on-chain privacy to Fourth Amendment rights. Peirce also criticized Biden-era DeFi broker rules that would force firms to report counterparty data to the IRS, warning such measures could stifle innovation in both DeFi and self-custody solutions. These calls to safeguard crypto privacy come as Tornado Cash co-founder Roman Storm faces a New York trial for alleged money laundering and up to 40 years in prison if convicted. Traders should monitor these regulatory shifts to assess potential impacts on privacy services and DeFi compliance.
Neutral
News that an SEC commissioner publicly defended crypto privacy and open-source developers provides regulatory clarity rather than introducing new restrictions, which should reassure traders about the resilience of privacy tools and DeFi innovation. In the short term, markets may view this as a neutral event since no new policy has been enacted. Over the long term, sustained support for self-custody and privacy technology could bolster confidence in DeFi protocols but is unlikely to drive immediate price moves in any single cryptocurrency.