Hester Peirce, a commissioner of the United States Securities and Exchange Commission (SEC) and head of the SEC’s Crypto Task Force, has strongly reaffirmed the right to crypto self-custody and privacy in financial transactions.
“I’m a freedom maximalist,” Peirce told The Rollup podcast on Friday, stating that self-custody of assets is a fundamental human right. She elaborated, “Why should I have to be forced to go through someone else to hold my assets? It baffles me that in this country, which is so premised on freedom, that would even be an issue — of course, people can hold their own assets.”
Peirce further emphasized that online financial privacy should be the standard. “It has become the presumption that if you want to keep your transactions private, you're doing something wrong, but it should be exactly the opposite presumption,” she stated.
These comments come at a time when the Digital Asset Market Structure Clarity Act, a bill proposing provisions for self-custody, anti-money laundering (AML) regulations, and asset taxonomy, has been delayed until 2026, according to Senator Tim Scott.
Exchange-Traded Funds (ETFs) Challenge Bitcoin’s Self-Custody Ethos
A notable trend emerging is the pivot of many large Bitcoin (BTC) whales and long-term holders away from self-custody towards ETFs. This shift is driven by the desire to benefit from tax advantages and the hassle-free management offered by investing in crypto through an ETF vehicle.
Dr. Martin Hiesboeck, the head of research at crypto exchange Uphold, observed, “We are witnessing the first decline in self-custodied Bitcoin in 15 years.”
Hiesboeck attributes this trend to the SEC’s approval of in-kind creations and redemptions for crypto ETFs in July. This mechanism allows authorized holders to exchange crypto for ETF shares and vice versa without immediately triggering a taxable event, a contrast to cash-settled ETFs.
“A move away from the self-custody mantra of ‘not your keys, not your coins’ is another nail in the coffin of the original crypto spirit,” Hiesboeck added.
In February, PlanB, a well-known Bitcoin analyst and investor famous for the BTC stock-to-flow model, announced that he had transferred his Bitcoin holdings to ETFs. This decision was made to alleviate the "hassle" associated with managing private keys.
PlanB’s announcement generated significant concern within the Bitcoin community. Many participants expressed worries that relinquishing custody to a third party directly conflicts with Bitcoin's foundational principles.