"Hester Peirce of SEC wants to end the collection of data on KYC's crypto community before stablecoin regulations create more of these databases".

What's going on?

U.S. Securities and Exchange Commission Chairwoman Hester PeirceSEC has called for financial institutions to reduce their collection of personal information about customers, and instead use "reusable digital credentials" in place of repeatedly collecting customer data.

She notes that societies are at a critical crossroads: one path is to collect more data and be more vigilant until the financial system becomes "panopticon", while the other is to use new technologies to catch criminals, but with less personal information than ever before.

Her idea is for attribute-based credentials that can verify a person's age, citizenship or identity without revealing their name, income or address. She stressed this was her personal opinion and not the impression of others.SEC

Why is this important?

Recent events have clearly demonstrated the cost of compulsory data collection: a massive increase in cybercrime.

This is Coinbase. Last year, attackers bribed overseas contractors and customer support staff to threaten internal systems with data leakage, leaving customers vulnerable.69,461 Leaked information included names, addresses, portfolios, e-mails, some social security numbers, out-of-state IDs and business records. Although passwords and private keys were not stolen, Coinbase warned that this was a case of "social engineering".CEO Brian Armstrong took the opportunity to criticize data retention regulations as "we don't want to keep it and our customers hate it", calling on Congress to review the Bank Secrecy Act.KYC

The Revolut. This month, the company disclosed that bad actors had used legitimate government e-mail domains to submit fake Revolut requests and provided customer information in response to those requests, including copies of passports, driver's licenses, selfies confirming identity, accounting records and business history, but asserted that its systems and client funds were unaffected.

The problem is that once the institution has authenticated its data, it doesn't need to hack into private keys or financial accounts directly because personal information itself becomes an asset for blackmail and stealth.

How will this affect crypto users?

This issue is growing in importance as Washington puts a new regulatory framework for stablecoins through. The genius act. It mandates that all authorized stablecoin payment issuers must have a customer authentication program.

Under the proposed enforcement, issuers are required to keep a name, date of birth, address and social security number before opening an account and retain this information. Five years after closing the account. It's aimed at customers who have a direct relationship with the issuer, such as an issue or redemption.

However, the proposed rule does allow for some technology to come in. FinCEN is Note that banks and credit unions use government-issued digital credentials such as mobile driver's licenses in the identification process.

FinCEN and banking regulators have been open to suggestions that the full bill should mention digital identities or verifiable credentials, but haven't put a specific clause in it.

Let's see what we can find out.

The fate of the final rule will be to dictate whether a stablecoin company builds another generation of customer identity databases or invests in systems that verify necessary attributes by storing less raw data, because the GENIUS Act already stipulates that issuers must know their customers but does not specify how many copies they should keep.

For users in Thailand who trade through Bitkub or other regulated platforms, the issue of "multi-platform storageKYC" is also a leakage risk to watch out for, especially as stablecoin usage and cross-border transfers within the region including Myanmar continue to expand.