SEC shifts on privacy: ZKP roundtable announced, DeFi in focus

The U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force has scheduled a landmark public roundtable on financial surveillance and privacy for October 17, signaling a regulatory pivot toward privacy-enhancing technologies in digital assets.

Regulatory Pivot Toward Privacy Technology

Commissioner Hester Peirce, head of the task force, said the three-hour session at SEC headquarters will examine zero-knowledge proofs (ZKPs) and related cryptographic tools that allow individuals to control how sensitive financial data is shared. The meeting is part of a ten-event “Crypto Clarity” series running through December.

“Technology that helps Americans protect their privacy is critically important as it enables people to choose when and with whom to share sensitive data about themselves,” Peirce said. The roundtable marks the sixth crypto-focused event since Gary Gensler’s departure as SEC Chair.

Zero-Knowledge Proofs Drive Market Innovation

ZKP technology is gaining ground in decentralized finance (DeFi). Market capitalization for ZK-focused assets climbed to $6.07 billion, up 2.8% in recent trading. Analysts estimate that the technology could reduce exposed user data by 97% while enabling AI-assisted fraud detection, as highlighted by CoinDesk’s ZKP coverage.

“Zero-knowledge proofs allow a person to prove who she is or something about her without requiring her to share her private information,” Peirce said at a Stanford blockchain conference. The method enables transaction validation without exposing underlying financial details.

DeFi Protocols Embrace Privacy Solutions

Leading DeFi platforms are integrating ZKP technology. StarkNet’s Layer 2 network is expanding its total value locked through adoption of STARK proofs, while zkSync and StarkWare continue to push ZK-Rollups that cut Ethereum transaction costs and boost throughput.

Peter Van Valkenburgh, executive director at Coin Center, called Peirce’s stance “one of the clearest defenses of financial privacy in the context of crypto and new technologies yet articulated.”

Market Response to Regulatory Clarity

Markets welcomed the SEC’s softer posture. Bitcoin traded at $112,910.65 following the announcement. The agency dissolved its crypto enforcement unit in Q2 2025, replacing it with the collaborative task force. Analysts expect regulatory clarity could lower compliance costs and increase institutional access.

However, past enforcement actions showed tokens labeled securities often lost 20–80% of their value. Proposed exemptions and safe harbors could shield U.S. firms from similar volatility.

Industry Experts Weigh Regulatory Balance

Legal experts stress the need to balance privacy with anti-money laundering rules. Studies suggest ZKP-based compliance systems could lower costs by 28% while meeting regulatory standards. Institutions are exploring privacy-preserving systems to engage with DeFi without exposing proprietary data.

“Understanding recent developments in privacy-protecting tools will assist the SEC and other financial regulators as we work on policy solutions in the crypto space,” Peirce said.

Implications for Crypto Market Structure

The roundtable follows earlier SEC talks on custody and tokenization. Coordination with the CFTC points to harmonized oversight for 24/7 crypto markets. Analysts say clear privacy rules could accelerate institutional adoption of DeFi, particularly platforms built on ZKPs.

Recap

The SEC will host its October 17 roundtable to address privacy in crypto markets, focusing on zero-knowledge proofs and related technologies. Meanwhile, retail traders exploring entry points can review our list of top crypto platforms for 2025.