SEC Commissioner Hester Peirce is advocating for reusable digital identities that would allow firms to verify customers without repeatedly collecting the same sensitive KYC data. The 2024 Coinbase breach affected 69,461 customers whose names, addresses, identity documents, and transaction histories were compromised by attackers who bribed customer-support staff. The proposed GENIUS Act implementation would require permitted stablecoin issuers to retain customer identification information for five years after account closure. Regulators are considering whether stablecoin issuers could rely on identity checks performed by other financial institutions rather than collecting new copies of the data. The final rule will determine whether stablecoin companies must build new customer identity databases or invest in attribute verification systems that hold less raw data.
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