SEC Chair Paul Atkins warned crypto could become a powerful financial surveillance tool if misregulated, citing blockchains’ ability to link transactions to users. He said a balanced framework can protect privacy while addressing national security.

""Indeed, if the instinct of the government is to treat every wallet like a broker, every piece of software as an exchange, every transaction as a reportable event, and every protocol as a convenient surveillance node, then the government will transform this ecosystem into a financial panopticon," Atkins said. Still, Atkins said there was a way to balance innovation and privacy. "Together, I am confident that we can shape a framework that ensures that neither technological nor financial advancements will come at the expense of personal freedoms," Atkins said."

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