SEC Claims Public Blockchains Offer Greater Transparency Than Wall Street

Public Blockchains and Transparency: SEC Commissioner Paul Atkins emphasized that public blockchains provide greater transparency than traditional finance, aiding law enforcement in tracking on-chain activities linked to off-chain identities.

Risks of Overregulation: Atkins warned that excessive regulation could transform crypto wallets and protocols into surveillance tools, potentially creating a financial panopticon by treating every wallet as a broker.

Privacy Tools in Blockchain: He highlighted the importance of zero-knowledge proofs and selective disclosure as methods to ensure compliance while maintaining user privacy, allowing for verification without revealing full transaction histories.

Market Function and Privacy Balance: Atkins noted that while transparency is crucial, it can deter legitimate financial behavior, urging regulators to find a balance between security needs and privacy protections to support orderly markets.