SEC’s Peirce Champions Crypto Privacy as Tornado Cash Trial Heats Up 🚒💼

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Amidst the swirling mists of legal drama and technological wizardry, US Securities and Exchange Commission (SEC) Commissioner Hester Peirce stood before an assembly of blockchain alchemists and digital sorcerers, declaring that the sanctity of private transactions must be guarded like a precious grimoire. 📜

Her impassioned plea resonates as the Tornado Cash saga, starring the enigmatic Roman Storm, approaches its climactic chapter. 📖

Peirce, with the eloquence of a modern-day Merlin, addressed the Science of Blockchain Conference, asserting that the rights to wield privacy-protecting technologies and to hold one’s own cryptographic keys must be defended. She added that creators of open-source privacy tools should not bear the sins of those who misuse their creations. 🛡️

“We must take decisive action to ensure that individuals can not only whisper secrets across the digital ether but also exchange value in the shadows, just as one might have done with physical coins in the age when the Fourth Amendment was but a glimmer in the Founding Fathers’ eyes,” she proclaimed.

She continued, “While a centralized entity or a DAO casting a spell over a DeFi app might impose constraints on its usage, an immutable, open-source protocol stands eternal, accessible to all. Thus, demanding that it conform to financial surveillance is as futile as trying to catch the wind in a sieve.” 🌬️

Peirce’s words echo as the jury in the Roman Storm trial ponders the fate of the co-founder of Tornado Cash, a service that cloaks the origins and destinations of cryptocurrency, much like a cloak of invisibility. 🧙‍♂️

Choking Privacy Technologies Suffocates Innovation

Peirce reminisced about the 1990s, when governments, driven by the specter of national security, sought to keep powerful cryptography out of civilian hands. It took the courage of cryptographers like Phil Zimmermann, the wizard behind Pretty Good Privacy (PGP), to challenge these restrictions, paving the way for a digital renaissance.

“Without the unyielding efforts of these cryptographers, the internet would have remained a barren wasteland, devoid of the rich tapestry of encrypted communications that we now take for granted,” she declared.

“Thanks to their heroic battles in the courts and the court of public opinion, we now rely on encryption for everything from sending emails to conducting online banking, purchasing goods from merchants, and engaging in countless daily activities.”

The DeFi Broker Rule Must Remain a Relic of the Past

In her speech, Peirce also warned against the perils of requiring businesses to maintain records of their transactions and those of their customers, a notion that nearly became reality with the ill-fated DeFi broker rule.

“Such a requirement would transform us into the eyes and ears of Big Brother, a role that is anathema to the principles of a free society. We should not compel intermediaries to insert themselves into peer-to-peer transactions,” she stated.

“Just as with the internet, technologies that serve legitimate purposes should remain permissionless and available to all, even if they can be misused. Any other approach would erode fundamental freedoms.”

Before its untimely demise, the DeFi broker rule, which was to be enacted during the Biden administration, would have mandated DeFi protocols to report gross proceeds from crypto sales, along with taxpayer information, to the Internal Revenue Service. However, this rule met its end under the pen of former President Donald Trump on April 10.

The Trials of Crypto Mixers

Roman Storm, currently on trial in the Southern District of New York, faces accusations that his mixing service was a haven for money launderers. If found guilty, he could face up to 40 years in the digital dungeons. 🏗️

Storm’s defense, supported by the industry, argues that Tornado Cash, like any tool, can be wielded by both virtuous citizens and nefarious actors. Developers, they contend, should not be held accountable for the actions of others. 🤷‍♂️

In a parallel tale, the co-founders of Samourai Wallet, another crypto mixing protocol, faced similar charges. Initially seeking to have the case dismissed, they ultimately chose to plead guilty on July 29.

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2025-08-05 09:19