SEC Commissioner Hester Peirce is calling for an end to mass collection and retention of know-your-customer data, warning that centralized anti-money-laundering databases create targets for hacking, leaks, phishing and physical attacks against crypto holders. She advocates zero-knowledge proofs and reusable digital credentials that would allow users to demonstrate compliance with regulatory requirements without disclosing or repeatedly storing underlying personal information. The proposal follows breaches at Coinbase and Revolut involving identity documents and other data collected for customer verification. Coinbase said 69,461 customers were affected, while Revolut disclosed identity and contact information, passport and driver's-license copies, and, for some customers, verification selfies, account statements and transaction histories. The debate is intensifying as the GENIUS Act and proposed implementation rules require permitted payment stablecoin issuers to establish customer-identification programs and retain identifying information. Regulators have asked whether final rules should recognize digital identity systems and verifiable credentials, leaving open how much duplicate data collection will remain.