SEC Chair Paul Atkins Warns Against Unchecked Government Use of Crypto Technology for Surveillance
At a Washington, D.C. roundtable on privacy and surveillance, SEC Chair Paul Atkins emphasized the need for policies that limit the government's ability to exploit cryptocurrency technology for surveillance purposes. He warned that without such limits, blockchain technology could be used to monitor investors' financial lives extensively, threatening individual liberty.
Atkins highlighted examples like the Consolidated Audit Trail and post-2008 financial regulations to illustrate how government appetite for data can risk investor freedoms. He advocated for formal policies that protect lawful financial transactions from bulk surveillance, especially as crypto enables more pervasive data access.
The SEC is currently planning to propose new rules for its crypto oversight, focusing on areas such as defining crypto securities, establishing tokenization standards, and creating an innovation exemption for new products. Within this framework, Atkins supports closer cooperation with the Commodity Futures Trading Commission (CFTC) to allow joint oversight and envisions regulated, user-friendly platforms where regulatory boundaries are less apparent.
He acknowledged that many digital assets may not qualify as securities, placing them outside SEC jurisdiction, which contrasts with ongoing debates around enforcement. The privacy issues underscored by cases like Tornado Cash illustrate these persistent regulatory challenges.
Additionally, SEC Commissioner Hester Peirce warned against imposing Bank Secrecy Act obligations on developers who do not custody user assets, cautioning about overextension of regulatory requirements.
