Hester Peirce, Commissioner of the U.S. Securities and Exchange Commission (SEC) and Director of the SEC Crypto Task Force, reaffirmed the right to self-custody and privacy of cryptocurrencies in financial transactions.
“I’m a freedom maximalist,” Peirce said Friday on the “Roll Up” podcast, saying self-control of one’s assets is a fundamental human right. She added:
“Why should I have to go through someone else to keep my assets? In a country that’s so premised on freedom, I’m baffled that that should be an issue. Of course people can keep their own assets.”
Peirce added that online financial privacy should be the norm. “There’s an assumption that if you want to keep your transactions private, you’re doing something wrong, but that should be the exact opposite,” she says.
The comments came as the Digital Asset Market Structure Clarification Act, a cryptocurrency market structure bill that includes provisions for self-custody, anti-money laundering (AML) regulations, and asset classification, is postponed until 2026, according to Senator Tim Scott.
Related: SEC to hold Privacy and Financial Oversight Roundtable in December
Exchange-traded funds (ETFs) challenge Bitcoin’s self-custody mentality
Many large Bitcoin (BTC) whales and long-term holders are pivoting from self-custody to ETFs to enjoy the tax benefits and hassle-free management of owning the cryptocurrency as an investment vehicle.
“We are witnessing a decline in self-custodial Bitcoin for the first time in 15 years,” said Dr. Martin Heasboek, head of research at cryptocurrency exchange Uphold.
Heasboek believes this is due to the SEC’s approval in July for the in-kind creation and redemption of crypto ETFs, which, unlike cash-settled ETFs, allows authorized holders to trade crypto for ETF shares and vice versa without triggering a taxable event.
“Moving away from the self-custodial mantra of ‘not the keys, not the coins’ would once again nail the true spirit of cryptocurrencies,” Heasboek added.
In February, Plan B, a prominent Bitcoin analyst, investor, and developer of the BTC stock-to-flow model, announced that it had transferred its Bitcoin to an ETF to reduce the “complexity” of private key management.
PlanB’s announcement sparked a backlash in the Bitcoin community, with many raising concerns that handing over control to a third party would conflict with Bitcoin’s core values.
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