Crypto is growing up, and with maturity comes uncomfortable conversations. The industry is moving beyond "number go up" speculation into thornier territory: how much financial privacy should people have when everything happens on transparent blockchains? And how do regulators monitor for fraud without turning the financial system into an open book for anyone to read?

These questions aren't theoretical anymore. Katherine Kirkpatrick Bos, General Counsel for Starkware, will join the Crypto Task Force Roundtable on Financial Surveillance and Privacy on December 15. In a recent conversation, she offered insight into how the regulatory conversation is evolving and what it means for everyone building, investing, or transacting in the crypto ecosystem.

Why This Roundtable Matters

Monday's meeting isn't just another regulatory checkbox exercise. It represents a fundamental reconsideration of how U.S. authorities think about financial privacy and surveillance. The catalyst was SEC Commissioner Hester Peirce's August speech, "Peanut Butter and Watermelon: Financial Privacy in the Digital Age," which criticized regulators for taking a "sledgehammer versus a scalpel" approach to law enforcement and anti-money laundering requirements.

Peirce's speech called out the Bank Secrecy Act and outdated know your customer requirements as ill-suited for modern challenges like constant data breaches and the economic realities of tokenization. She raised an uncomfortable question: maybe we've gotten the balance wrong between protecting privacy and monitoring financial transactions.

That balance matters because it will shape crypto regulation in the United States and ripple globally. How do you build financial systems that protect privacy while maintaining the oversight needed to prevent fraud, money laundering, and market manipulation?

Builders Take Center Stage

The structure of Monday's roundtable tells you where things are heading. The first half won't be the usual panel discussion. Instead, builders will demonstrate actual privacy technology in action.

"The beauty of this roundtable is the first half of the roundtable is made up of builders, demonstrating their privacy technology," Bos explained. "This one is unique because the first half, there are a number of people actually demonstrating how this technology works."

You'll see a range of approaches, from frameworks designed with compliance baked in to more radical solutions. The second half shifts to policy: should these technologies be used at all? How should lawmakers treat them? These questions matter because historically, regulators have viewed privacy technology with suspicion, assuming it exists primarily to hide illegal activity.

Privacy and Transparency Aren't Enemies

There's widespread confusion about whether financial privacy and regulatory transparency can coexist. The reality is messier than the binary framing suggests. Regulatory policy itself demands protection of personal data, especially given how often American consumers' information gets compromised in data breaches.

Privacy-enhancing technologies like zero-knowledge proofs offer a way forward. Many emerging tools use "viewing keys," cryptographic methods that keep transactions private from the general public while allowing regulators with proper authority, like a subpoena, to access the information they need.

Think about buying alcohol. You need to prove you're over 21, but current systems require showing your driver's license with your full address, birthdate, height, weight, and more. Only your birthdate matters for the transaction. Zero-knowledge proofs would let you prove your age without revealing all that extraneous personal data. You prove you know something without revealing the underlying information itself.

The On-Chain Trading Dilemma

For exchanges and custodians, the privacy question becomes urgent when you imagine large-scale trading moving on-chain. Right now, most trading information stays behind closed doors where regulators can monitor for market manipulation without making strategies visible to competitors.

If that activity becomes visible on public blockchains, you create new problems. Sophisticated actors could use faster technology or algorithmic bots to front-run trades, potentially harming retail investors. Global hedge funds aren't going to move their trading on-chain if it means broadcasting their strategies to every competitor watching the blockchain.

This isn't hypothetical hand-wringing. When JPMorgan Chase & Co. (JPM) CEO Jamie Dimon recently praised tokenization, it signaled that institutional adoption is accelerating. That makes the privacy question economically urgent, not just philosophically interesting.

Beyond New Regulations

The most important outcome from Monday's roundtable might not be new rules but rather increased mainstream acceptance of privacy solutions. Traditionally, established financial institutions have avoided privacy technologies, worried about regulatory backlash or being seen as facilitating bad actors.

The newer generation of privacy technologies differs fundamentally from earlier versions. They're built with compliance in mind from day one, incorporating mechanisms for regulatory access rather than treating privacy as absolute anonymity. That's a crucial distinction.

The SEC's broader crypto regulatory efforts under the newly formed Crypto Task Force suggest the agency is moving toward establishing clear frameworks that can accommodate innovation while protecting investors. That's a delicate balance, but Monday's roundtable indicates regulators are at least willing to look at the technology seriously.

Privacy Isn't Just For Criminals

The biggest misconception about crypto privacy is that it's primarily for illicit activity. The reality couldn't be more different. Legitimate use cases are everywhere.

Consider payroll. Companies with global operations find it easier and cheaper to pay employees in stablecoins like USD Coin (USDC), especially across different countries. But no employer wants compensation information visible on a public blockchain where anyone can see exactly what each employee earns. That's not about hiding illegal activity. It's about basic dignity and competitive information.

Other legitimate applications include protecting business-sensitive information during on-chain transactions, preventing competitors from reverse engineering trading strategies, and ensuring individuals maintain financial privacy without sacrificing compliance. The persistence of the "privacy equals crime" misconception causes regulators to miss the genuine value these technologies deliver to ordinary people and businesses operating entirely within legal boundaries.

What Happens Next

As policymakers sharpen their focus on digital assets, blockchain surveillance and compliance will play increasingly central roles in shaping how crypto markets operate. The intersection of privacy, surveillance, and compliance will define the next phase of digital asset regulation.

Success depends on open dialogue between regulators and builders, and on frameworks that reflect the complexities of decentralized networks without stifling innovation. Monday's roundtable represents a meaningful step in that direction, suggesting that transparency, accountability, and user protection can coexist with the privacy necessary for both individual dignity and functional markets.

The outcome may not be immediate legislation. Instead, it might be something more subtle but equally important: a shift in how regulators and market participants think about the role of privacy in an increasingly tokenized financial system. That shift could determine whether crypto reaches its potential as a genuine alternative to traditional finance or gets stuck in regulatory limbo, unable to serve either institutional players demanding privacy or regulators demanding oversight.