SEC Commissioner Peirce Proposes Overhaul of KYC and AML Data Collection

SEC Commissioner Hester M. Peirce proposed at the 2026 SIFMA Digital Assets Conference that the current KYC and AML frameworks should be revised to utilize cryptographic technologies like zero-knowledge proofs. Peirce argued that the existing model of collecting vast amounts of personal data to identify criminals is inefficient and poses significant privacy and security risks. She suggested shifting toward attribute-based credentials, which allow users to verify necessary conditions—such as age or investor status—without disclosing sensitive personal information. Additionally, she advocated for allowing financial institutions to rely on identity verification results already performed by other regulated entities to reduce redundant data storage and costs.