SEC’s Hester Peirce: Crypto Self-Custody and Privacy Are Rights
United States Securities and Exchange Commission (SEC) Commissioner Hester Peirce reaffirmed support for individuals’ ability to self-custody digital assets and maintain privacy in financial transactions, describing both as fundamental rights consistent with U.S. principles. Peirce made the remarks on Friday during an appearance on The Rollup podcast.
Peirce, who also leads the SEC’s Crypto Task Force, characterized herself as a “freedom maximalist” and said self-custody is a basic human right. She questioned why individuals should be required to rely on intermediaries to hold their assets in a country founded on freedom, adding that people should be able to retain direct control of their holdings.
She further stated that financial privacy online should be the default. According to Peirce, current assumptions often equate privacy with wrongdoing, and she argued that the presumption should be reversed.
The comments come as the Digital Asset Market Structure Clarity Act — a market-structure bill addressing self-custody, anti-money laundering requirements, and asset taxonomy — has been postponed until 2026, according to Senator Tim Scott.
ETFs test Bitcoin’s self-custody principles
Large Bitcoin (BTC) holders and long-term investors are increasingly moving from self-custody to exchange-traded funds (ETFs), citing tax efficiencies and simplified asset management available through investment vehicles.
Dr. Martin Hiesboeck, head of research at crypto exchange Uphold, said the market is seeing the first decline in self-custodied Bitcoin in 15 years.
Hiesboeck attributed the trend to the SEC’s approval in July of in-kind creations and redemptions for crypto ETFs, enabling authorized participants to exchange crypto for ETF shares and the reverse without a taxable event, unlike cash-settled ETFs.
He added that moving away from the self-custody maxim “not your keys, not your coins” undermines the original ethos of the crypto ecosystem.
In February, Bitcoin analyst and investor PlanB, known for developing the BTC stock-to-flow model, said he transferred his Bitcoin to ETFs to reduce the burden of private key management.
The announcement drew criticism from some members of the Bitcoin community, who argued that entrusting third parties with custody runs counter to Bitcoin’s core principles.
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