The SEC’s Crypto Task Force has scheduled a four-hour roundtable on financial surveillance and privacy for December 15, bringing together zero-knowledge proof developers, civil liberties advocates and protocol executives to debate whether blockchain privacy tools can coexist with anti-money laundering enforcement.
The timing is deliberate. Two months ago, the co-founders of Samourai Wallet received prison terms of five and four years for operating what prosecutors called an unlicensed money transmitter that facilitated $237 million in illegal transactions.
Three months earlier, a jury convicted Tornado Cash developer Roman Storm on charges of transferring money without a license, but deadlocked on money laundering charges and acquitted him of sanctions violations.
FinCEN’s proposed Section 311 rule targeting the international commingling of cryptocurrencies as a “class of transactions primarily related to money laundering” remains unfinished; the comment period has been closed since January 2024 and the final text is expected in 2025.
Commissioner Hester Peirce, who leads the task force, described the event as an opportunity to “recalibrate financial oversight measures to ensure the protection of our nation and the freedoms that make America unique.”
The panel list reads like a blueprint for what that recalibration could look like: Zcash founder Zooko Wilcox, Aleo CEO Koh, Espresso Systems CSO Jill Gunter and SpruceID founder Wayne Chang represent the zero-knowledge and privacy-protecting computing camp.
Summer Mersinger of the Blockchain Association and JW Verret of George Mason Law School provide the policy and legal framework.
ACLU Senior Policy Analyst Jay Stanley represents the civil liberties perspective, which has historically treated financial oversight as a Fourth Amendment pressure point.
The push for privacy tools at three levels sets the background. Samourai’s sentences show the most severe operational liability for wallet mixing: Co-founders Keonne Rodriguez and William Lonergan Hill pleaded guilty, and Judge Denise Cote sentenced them in November 2025.
The DOJ treated Samourai as a mixer that facilitated darknet markets, cyber intrusions, and transactions related to sanctioned jurisdictions.
The theory is: if software enables financial privacy and someone operates it as a service, he or she is running an unlicensed money transmission business.
The Storm verdict draws a narrower line. The jury convicted him of the unlicensed broadcaster conspiracy, but deadlocked on the more serious charge of money laundering and acquitted him of sanctions conspiracy.
Prosecutors alleged that Tornado Cash facilitated more than $1 billion in illegal transactions, including flows linked to North Korea-linked actors. Yet the jury proved more comfortable punishing “money transmission” theories than affirming the full “developer is money launderer” leap.
FinCEN’s Section 311 proposal is the regulatory overhang that makes the SEC’s roundtable feel coordinated with a broader federal position.
The agency issued a Notice of Proposed Rulemaking in October 2023 identifying the international commingling of cryptocurrencies as a money laundering concern and proposing enhanced recordkeeping and reporting requirements for covered financial institutions when they know, suspect, or have reason to suspect that a transaction involves such commingling.
Legal analyzes at the time highlighted how unusual it was for FinCEN to use Section 311 to target a class of activities rather than a specific institution or jurisdiction.
The comment period ended in January 2024. An entry in the Unified Agenda indicated a move toward a final rule phase with a 2025 period.
As of early December 2025, FinCEN’s list of special measures still shows the cryptocurrency mix action anchored in the 2023 finding, without a stated link to the final rule, indicating that the rule has not yet been finalized.
The gap between the NPRM and the final rule creates uncertainty about how aggressively FinCEN will institutionalize oversight expectations for blending flows.
The privacy-preserving calculation bet
The panelists represent a technical thesis: that zero-knowledge proofs, homomorphic encryption, and programmable privacy can meet compliance requirements without exposing transaction graphs to general surveillance.
Aleo, Espresso, Zcash and similar projects are building systems that allow users to prove they meet regulatory thresholds, are an unsanctioned counterparty, have met tax reporting requirements and are accredited investors, without disclosing the full transaction history.
The theory assumes that regulators will accept selective disclosure, supported by cryptographic evidence, rather than requiring visibility of the entire ledger by default.
SpruceID’s Wayne Chang brings a complementary angle: decentralized identity systems that allow users to check certifications of compliance status without relying on centralized intermediaries.
The counterargument, implicit in the Samourai and Storm prosecutions, is that privacy-by-default architectures obscure enforcement sightlines too much.
Prosecutors argued that Tornado Cash and Samourai enabled bad actors precisely because the tools failed to distinguish between legitimate instances of privacy use and criminal misappropriation.
The DOJ position treats privacy tools as infrastructure that should be designed with built-in access for law enforcement, not bolted on.
This frame eliminates the distinction between ‘tool’ and ‘service’ and treats developers who deploy privacy-protecting code as financial services operators subject to the obligations of the Bank Secrecy Act.
What the SEC gets out of this conversation
The roundtable will provide the SEC with a public report on whether privacy-preserving technology can meet securities law obligations.
The committee does not directly regulate mixing; i.e., FinCEN and DOJ territory. However, it governs the issuance, trading and custody of digital assets that can be structured with privacy features.
If a tokenized security uses zero-knowledge proofs to hide transaction details, does that violate broker-dealer reporting requirements?
Can an alternative trading system use privacy-preserving calculations to match orders without disclosing pre-trade information to competitors, while still complying with the transparency rules of the ATS Regulation?
The roundtable panelists may answer these questions live and on record, with Chairman Paul Atkins and Commissioners Mark Uyeda and Hester Peirce present.
The timing also positions the SEC against FinCEN.
If FinCEN finalizes the Section 311 mixer rule with broad restrictions, the SEC can point to the December roundtable as evidence that it examined whether technology could solve the compliance problem before moving to ban.
On the other hand, if FinCEN softens or further delays the rule, the SEC roundtable becomes a signal that the administration is open to privacy-protective solutions that meet law enforcement needs.
Either way, the event builds a record that allows the SEC to claim that it consulted technologists, civil libertarians, and industry before deciding how to treat privacy when regulating digital assets.
The SEC is now deciding how much weight to give to privacy-preserving calculations in its own regulations.
If the roundtable reaches consensus that zero-knowledge proofs can meet compliance obligations, the committee could incorporate that flexibility into broker-dealer, ATS and custody rules for digital assets.
If the roundtable splits into the camps of “privacy is a right” versus “privacy enables crime,” the SEC will fall back on existing frameworks that require significant oversight and leave privacy advocates to sue.
The Samourai judgments and the Storm judgment have already defined the limits of criminal liability for the time being.
The December 15 roundtable will decide whether there is room for the existence of privacy-protecting technology at all within these boundaries.