Privacy compliance in the United States is standing at a crossroads as 2026 unfolds, with organizations facing a dizzying array of new laws, enforcement actions, and technological innovations. Recent headlines have highlighted both the risks of data exposure and the promise of privacy-preserving solutions, leaving companies scrambling to adapt to a landscape that seems to shift by the day. From sweeping state privacy statutes to breakthroughs in zero-knowledge verification, the story of compliance in 2026 is one of both mounting complexity and emerging hope.
According to Security Boulevard, the traditional approach to compliance—requiring companies to hand over sensitive information to prove they’re following the rules—has increasingly come under fire. The risks are stark: in 2024 alone, over 276 million individuals saw their protected health data exposed or stolen, a sobering statistic that underscores the urgency for more secure verification methods. As cyberattacks grow more sophisticated and frequent, a quarter of board directors now view cyberthreats as the most significant risk to their business in the coming year.
Enter zero-knowledge proofs (ZKPs), a cryptographic innovation that allows organizations to prove compliance without revealing the underlying data. This concept, once the domain of cryptographers and mathematicians, is now making real inroads in highly regulated sectors like finance, health care, and cybersecurity. ZKPs are gaining traction because they offer a way to confirm that a company’s processes are sound—without exposing the actual content, which preserves both confidentiality and regulatory alignment.
Two main ZKP protocols are leading the charge: ZK-SNARKs and ZK-STARKs. ZK-SNARKs deliver fast verification and small proof sizes, though they require a trusted setup. ZK-STARKs, on the other hand, offer greater transparency and are designed to be secure against quantum computing threats, albeit at the cost of larger proofs. Both protocols rely on advanced cryptography such as elliptic curve systems and polynomial commitments, and many modern implementations use noninteractive formats to keep things scalable and efficient.
These technologies are not just theoretical. In the world of regulatory reporting and audit automation, ZKPs are already helping to ease the massive financial burden of compliance. Anti-money laundering (AML) requirements alone cost U.S. institutions over $23 billion a year, much of it spent on data collection and reporting. ZKPs offer a way for financial institutions to demonstrate that they’ve flagged suspicious activity or met regulatory thresholds—without the need to hand over raw customer data. In effect, regulators can receive instant cryptographic proof through on-demand attestations, slashing paperwork and manual audits in favor of secure, real-time dashboards.
But there are hurdles. Generating and verifying zero-knowledge proofs can be computationally demanding, which poses challenges at enterprise scale. And with regulatory frameworks still catching up, many organizations are hesitant to make the leap. Despite these obstacles, the benefits are proving too significant to ignore. Regtech is already integrating ZKPs with cloud computing, machine learning, and blockchain, making compliance more scalable and affordable. The emergence of ZKP-as-a-service providers is lowering the barrier to entry, allowing companies to deploy these tools without needing deep cryptographic expertise.
Meanwhile, the legal landscape is evolving just as rapidly. JD Supra reports that 2025 saw a flurry of privacy law enforcement, with regulators focusing on privacy notices, opt-out mechanisms, telemarketing, text messaging, biometric data, health data, and children’s personal information. New comprehensive privacy laws took effect on January 1, 2026, in Indiana, Kentucky, and Rhode Island. Rhode Island’s law stands out by requiring disclosure of all third parties to whom data is sold and introducing a separate notice requirement for companies that sell personally identifiable information.
California continues to set the pace for privacy regulation. The latest California Consumer Privacy Act (CCPA) regulations, which became effective on January 1, 2026, introduce formal requirements for risk assessments, expanded consumer rights, and cybersecurity audits. Covered businesses must now submit risk assessments and certifications of audit completion to the California Privacy Protection Agency in the coming years.
Children’s privacy is another area of heightened scrutiny. Laws in Nebraska and Arkansas, effective in 2026, impose requirements that go beyond the federal Children’s Online Privacy Protection Act (COPPA). Nebraska’s Age-Appropriate Design Code, for example, took effect at the start of the year, though enforcement begins in July. Arkansas’ Children and Teens’ Online Privacy Protection Act, also effective in July, introduces heightened protections for minors, though it may face legal challenges on federal preemption grounds.
Other states are not far behind. Connecticut has amended its Data Privacy Act to prohibit the sale of personal data or targeted advertising to minors, regardless of consent, and now requires data protection impact assessments where risks are identified. Oregon prohibits the sale of a consumer’s personal data without consent for those under 16 and restricts the sale of precise geolocation data. Delaware similarly restricts processing of personal data for targeted advertising for consumers under 18 unless consent is obtained.
Enforcement actions and litigation trends from 2025 provide a roadmap for what companies can expect. California announced the largest CCPA settlement to date, focusing on failures to honor opt-out requests and misleading cookie banners. Connecticut imposed its first monetary penalty under its Data Privacy Act, citing misconfigured or inoperable consumer rights mechanisms. Texas ramped up enforcement under its own Data Privacy and Security Act, targeting unlawful collection and sale of sensitive personal data and emphasizing the need for state-specific notices.
Litigation around tracking technologies, particularly under California’s Invasion of Privacy Act (CIPA), remains a risk. Plaintiffs allege that cookies, session replay tools, and third-party pixels intercept website communications, triggering all-party consent requirements. Best practices have emerged for cookie consent banners: clarity, genuine choice, and blocking nonessential tracking unless and until consent is affirmatively given. Courts are increasingly scrutinizing the credibility of plaintiffs and the adequacy of companies’ consent mechanisms, as highlighted by a recent defense victory in a federal case involving pixel-based tracking allegations.
Looking ahead, companies must also navigate a changing regulatory environment for telemarketing and text messaging. A Supreme Court decision and appellate rulings have shifted the balance of power from federal regulators to judges, creating uncertainty around the Telephone Consumer Protection Act (TCPA). The FCC’s new revocation-of-consent rule, effective April 2025, expands how consumers can opt out of messages, and businesses must honor revocation requests expressed in any reasonable manner.
Biometric privacy remains a legal minefield. In 2025, Texas secured a $1 billion settlement with Google over allegations of improper collection and use of biometric identifiers. Texas has since amended its law to exempt certain AI systems used for security and fraud prevention, while Colorado has expanded its own biometric privacy requirements.
As 2026 progresses, organizations face a patchwork of laws that go beyond notice and consent, placing real limits on how data can be used—especially for sensitive information and minors. The convergence of advanced cryptographic tools like ZKPs and a maturing regulatory framework may finally offer a path to compliance that is both private and verifiable, giving companies a fighting chance to stay ahead of both hackers and regulators.
In this environment, vigilance and adaptability are the new watchwords. The winners in 2026 will be those who can balance transparency, security, and innovation—without missing a beat as the rules of the game continue to change.
