SEC’s Hester Peirce Doubles Down: Crypto Self-Custody and Privacy Are Non-Negotiable Rights

In a regulatory landscape often accused of favoring walled gardens over wallets, one SEC Commissioner is drawing a line in the digital sand.

Self-Custody: The Un-bankable Right

Peirce's stance cuts through the usual regulatory fog. She argues that the core promise of cryptocurrency—true ownership—gets neutered if users can't hold their own keys. It's a direct challenge to the growing push for mandatory third-party custodians, a move that would essentially turn crypto exchanges into the very intermediaries the technology was built to bypass.

Privacy Isn't a Bug, It's a Feature

The Commissioner doesn't stop at custody. She connects the dots to privacy, framing it not as a shield for illicit activity but as a fundamental financial right. In an era of pervasive surveillance, her argument suggests that expecting every transaction to be broadcast on a public ledger for regulators misses the point—and the potential—of the underlying tech.

The push for self-sovereignty faces fierce headwinds, of course. Compliance departments at traditional finance firms break out in hives at the thought, preferring the tidy, taxable, and controllable flows of custodial models. Peirce's position, however, reframes the debate: is the goal to make crypto safe for the old system, or to build a new one?

It's a provocative stand that puts protocol purity ahead of political convenience—a rare move in finance, where the most innovative product is usually a new fee.

TLDR

• Hester Peirce defends the right to crypto self-custody, calling it a basic freedom that should not be controversial.
• Peirce criticizes the growing trend of viewing financial privacy as a red flag and argues that privacy should be the default.
• The SEC Commissioner stresses that people should not be forced to rely on intermediaries to control their digital assets.
• Peirce’s comments come amid uncertainty about U.S. crypto legislation, as the Digital Asset Market Structure Clarity Act is delayed until 2026.
• Wall Street-backed Bitcoin ETFs are drawing users away from self-custody, leading to the first decline in self-custodied Bitcoin in 15 years.

Hester Peirce, a commissioner with the U.S. Securities and Exchange Commission (SEC), has again voiced her strong defense of crypto self-custody. Peirce stressed that individuals should have the right to control their assets without relying on intermediaries. She also expressed concern over the growing perception that financial privacy equates to suspicious behavior. Peirce’s remarks reflect a broader debate about the future of crypto and the role of government regulation.

Self-Custody as a Fundamental Right

During an appearance on The Rollup podcast, Hester Peirce stated that self-custody should be a fundamental freedom. She argued that people in the U.S. should be able to manage their assets independently. “Of course people can hold their own assets,” Peirce said. She questioned why the idea of holding one’s own assets has become controversial. Peirce, who identifies as a “freedom maximalist,” emphasized the importance of personal liberty in a country founded on such principles.

Peirce’s defense of self-custody comes at a time when crypto users face increasing pressure to use intermediaries. Wall Street-backed products, such as spot Bitcoin exchange-traded funds (ETFs), are gaining traction. These products are attracting investors who prefer the convenience and tax advantages of ETFs over the complexities of managing private wallets. Despite these developments, Peirce remains firm in her belief that individuals should retain control over their digital assets.

Privacy Should Not Be Seen as Suspicious

Hester Peirce also criticized the growing tendency to treat financial privacy as a sign of wrongdoing. She argued that privacy in financial transactions should be the default, not the exception.

“If you want to keep your transactions private, the assumption shouldn’t be that you’re doing something illegal,” Peirce explained.

She further stressed that privacy should be viewed as a right rather than a red flag.

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

Her comments come at a time when concerns about surveillance and privacy in digital finance continue to rise. As blockchain technology matures, the debate about privacy in crypto transactions intensifies. Peirce’s position aligns with a broader movement advocating for user autonomy and privacy rights in the digital age.

Peirce’s statements occur against the backdrop of legislative uncertainty surrounding cryptocurrency in the U.S. Senator Tim Scott recently announced that the Digital Asset Market Structure Clarity Act has been delayed until 2026. This bill aims to address issues such as self-custody, anti-money laundering regulations, and the classification of digital assets. However, the delay leaves the industry without a clear legal framework on how Americans can hold and use digital assets.

The lack of legislation has created an atmosphere of uncertainty in the crypto industry. Crypto users and businesses alike are seeking clarity on the rules governing self-custody and digital asset management. Peirce’s defense of self-custody underscores her belief in a system where individuals can freely manage their own assets, regardless of regulatory uncertainty.

Competition from Wall Street Products

As the debate over self-custody continues, Wall Street-backed products like bitcoin ETFs are gaining popularity. These products provide an easy way for traditional investors to gain exposure to Bitcoin without directly managing crypto wallets. However, the growth of ETFs has led to a decline in self-custodied Bitcoin, according to Dr. Martin Hiesboeck, head of research at Uphold. He noted that this is the “first decline in self-custodied Bitcoin in 15 years.”

The introduction of in-kind redemptions earlier this year has made ETFs even more attractive. This feature allows ETF holders to swap crypto for shares without triggering a taxable event. The tax advantages and convenience of ETFs are compelling reasons for some investors to MOVE away from holding their own digital assets.

The shift from self-custody to Wall Street products was further highlighted by the move of analyst PlanB. In February, PlanB disclosed that he had moved his Bitcoin into ETFs. He explained that he wanted to avoid the stress of managing private keys. “Not having to hassle with keys gives me peace of mind,” he said.

PlanB’s decision sparked backlash from crypto purists who view the move as a betrayal of Bitcoin’s foundational principles. These critics argue that relying on centralized custody goes against the decentralized ethos of cryptocurrencies. However, for others, the simplicity and security of ETFs outweigh the risks associated with self-custody.

Hester Peirce Continues to Champion Self-Custody

Hester Peirce’s defense of self-custody and financial privacy is not new. Over the years, she has consistently argued that individuals should have the right to control their assets without government interference. She remains a vocal advocate for personal liberty in the face of increasing regulation and surveillance in the crypto space.

Peirce’s remarks reflect her broader philosophy of empowering individuals to make decisions about their own finances. While the crypto industry faces regulatory uncertainty, her stance on self-custody remains steadfast.