Zcash and privacy protocols face a “do-or-die” SEC meeting that determines if developers are personally liable for code

The SEC's Crypto Task Force scheduled a four-hour roundtable on December 15th to discuss whether blockchain privacy tools, such as those utilizing zero-knowledge proofs, can comply with anti-money laundering (AML) enforcement, a decision that could determine the personal liability of developers.

The context is defined by recent legal actions: the sentencing of Samourai Wallet co-founders for operating an unlicensed money transmitter, and the conviction of Tornado Cash developer Roman Storm on similar charges, though he was acquitted of money-laundering conspiracy. These cases highlight the current regulatory squeeze, where prosecutors treat privacy software as infrastructure subject to Bank Secrecy Act obligations, blurring the line between a tool and a service.

The roundtable features privacy advocates (Zcash founder Zooko Wilcox, Aleo CEO Koh), legal experts, and civil liberties representatives. The technical thesis being presented is that zero-knowledge proofs and similar technologies can allow selective disclosure to prove compliance without exposing full transaction graphs. The SEC's interest lies in how these privacy features interact with securities laws, such as broker-dealer reporting and Regulation ATS transparency rules. The outcome of this meeting will influence whether the SEC incorporates flexibility for privacy-preserving computation into digital asset regulation or defaults to existing surveillance-heavy frameworks.

(Source：CryptoSlate)