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US Securities and Exchange Commission Commissioner Hester Peirce has reiterated her support for crypto self-custody, emphasizing it as a fundamental freedom and countering the increasing notion that privacy in financial transactions is inherently suspicious.
Key Takeaways:
- Hester Peirce asserts that crypto self-custody is a fundamental freedom, and individuals should not be compelled to depend on intermediaries for asset management.
- She contends that financial privacy ought to be the norm and should not be perceived as indicative of illicit activity.
- Her statements emerge amid delays in crypto legislation and the attraction of some investors to ETFs, diverting them from self-custody.
During her appearance on The Rollup podcast, Peirce identified herself as a “freedom maximalist” and maintained that individuals should not be obligated to rely on intermediaries for asset control.
“Certainly, individuals can manage their own assets,” she remarked, questioning why this principle should be contentious in a nation founded on individual liberty.
SEC’s Peirce Advocates for Financial Privacy as the Standard
Peirce also criticized what she referred to as a cultural shift that views financial privacy as a warning sign. Instead, she argued that privacy should be the standard, rather than a marker of misconduct.
“If you wish to keep your transactions confidential, the presumption shouldn’t be that you are engaging in illegal activities,” she stated. “It should be the contrary.”
Her comments come as ambiguity persists regarding US crypto legislation.
Senator Tim Scott has indicated that the Digital Asset Market Structure Clarity Act, which addresses self-custody, anti-money laundering regulations, and the classification of digital assets, has been postponed until 2026.
SPECIAL EP: America’s Crypto Regulatory Reset with SEC Commissioner @HesterPeirce.
Rob and Andy interviewed @SECGov Commissioner Hester Peirce about why 2025 marks the line in the sand for crypto regulation in America.
After years of regulation through enforcement, the table is… pic.twitter.com/QlNyJTDIgS— The Rollup (@therollupco) November 28, 2025
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This hiatus has left the sector without a legal framework that specifically addresses how Americans can legitimately hold and utilize digital assets.
Peirce’s remarks also coincide with a period when self-custody is facing competition from Wall Street offerings.
Spot Bitcoin exchange-traded funds have simplified access to crypto for traditional investors, leading some users to move away from directly holding coins in private wallets.
Self-Custodied Bitcoin Declines for the First Time in 15 Years
Dr. Martin Hiesboeck, head of research at Uphold, noted that the industry is experiencing the “first decline in self-custodied Bitcoin in 15 years,” as investors transition to ETFs for tax benefits and convenience.
The introduction of in-kind redemptions earlier this year enables ETF holders to exchange crypto for shares without incurring a taxable event, a feature that directly competes with personal wallets.
The primary reason for the significant movements of whales out of self-custody is straightforward: taxes.
We are witnessing the first decline in self-custodied Bitcoin in 15 years.
BlackRock’s iShares spot Bitcoin ETF (IBIT) has facilitated over $3 billion worth of Bitcoin conversions from whales.… pic.twitter.com/yepXRbLozM— Dr Martin Hiesboeck (@MHiesboeck) October 22, 2025
The discussion heightened in February when analyst PlanB revealed that he had transferred his Bitcoin into ETFs to alleviate the burden of managing private keys.
He asserted that ETFs provide a convenient alternative, minimizing the complexities and risks tied to holding private wallet keys.
A significant factor behind PlanB’s choice is the security challenge associated with managing private keys. “Not having to deal with keys gives me peace of mind,” he expressed.
This announcement provoked criticism from purists who view centralized custody as a violation of Bitcoin’s foundational principles.
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