SEC’s Hester Peirce Defends Crypto Self-Custody and Financial Privacy

Core Viewpoint - Hester Peirce, a commissioner at the SEC, defends crypto self-custody as a fundamental freedom and argues against the notion that financial privacy is inherently suspicious [1][4][9] Group 1: Self-Custody and Financial Privacy - Peirce identifies herself as a "freedom maximalist," advocating that individuals should not be compelled to depend on intermediaries for asset control [3][9] - She emphasizes that financial privacy should be the default assumption, not an indication of illicit activity, stating that wanting to keep transactions private should not be viewed negatively [4][9] Group 2: Legislative Context and Industry Trends - The Digital Asset Market Structure Clarity Act, which addresses issues related to self-custody and anti-money laundering, has been postponed until 2026, leaving the crypto industry without a clear legal framework [5] - The rise of spot Bitcoin exchange-traded funds (ETFs) is making crypto more accessible to traditional investors, which is drawing some users away from self-custody solutions [6][9] Group 3: Market Dynamics - The industry is experiencing a decline in self-custodied Bitcoin for the first time in 15 years, as investors are increasingly opting for ETFs due to tax advantages and convenience [7] - The introduction of in-kind redemptions for ETFs allows holders to exchange crypto for shares without incurring tax liabilities, presenting a competitive advantage over personal wallets [7]