Overview
- Peirce delivered the proposal at SIFMA on Sept. 23 and framed it as a personal policy signal rather than a change to SEC rules.
- Zero-knowledge proofs and verifiable, attribute-based credentials would let a user prove facts like age, accredited status, or sanctions clearance without revealing name or address.
- The proposal has technical traction inside regulators because SEC Crypto Task Force staff met with privacy-tech vendors in July and FinCEN issued narrow guidance on digital credentials in early September.
- Current law has not changed: firms remain bound by Bank Secrecy Act and AML recordkeeping, and regulators have not decided whether a cryptographic proof can replace retained identity records.
- Practical limits and risks include revoked or expired credentials, stolen wallets, the need to confirm an issuer’s original checks, and the fact that proofs cannot replace source-of-funds checks or transaction monitoring.