SEC Commissioner Hester Peirce has reaffirmed her stance on crypto self-custody, advocating it as a fundamental right that should be protected. Speaking at The Science of Blockchain Conference on August 4, 2025, Peirce, often referred to as "crypto mom," emphasized the importance of embracing technologies that safeguard individuals' rights to self-custody their cryptocurrency.
Peirce's advocacy for self-custody aligns with her broader defense of financial privacy in the digital age. She urged the U.S. government to "guard zealously people's right to live private lives and to use technologies that enable them to do so". She argued that while concerns about financial privacy often stem from a desire to protect against crime and threats, curtailing financial privacy and hindering decentralizing technologies is the wrong approach.
Self-custodial wallets allow individuals to directly manage their crypto assets without relying on intermediaries like exchanges or custodial platforms. This gives users greater control over their funds, eliminating the risks associated with third-party custodians, such as withdrawal delays, frozen accounts, and exchange hacks. By holding their own private keys, users are not at the mercy of centralized entities.
Peirce has also drawn parallels to the Fourth Amendment, which protects individuals from unreasonable government searches, emphasizing the importance of safeguarding personal privacy in financial matters. She stated that "We should take concrete steps to protect people's ability not only to communicate privately, but to transfer value privately, as they could have done with physical coins in the days in which the Fourth Amendment was crafted".
Commissioner Peirce's advocacy highlights the growing recognition of non-custodial wallets as essential tools for user independence in cryptocurrency. By enabling individuals to control their assets without intermediaries, non-custodial wallets uphold the principles of privacy and decentralization that many view as foundational to cryptocurrency.
In related developments, SEC Chairman Paul Atkins announced "Project Crypto," a comprehensive initiative to modernize securities regulations and position the United States as a global hub for cryptocurrency and blockchain innovation. Atkins stated the SEC will create space for both intermediated and non-intermediated models. A key priority of Project Crypto involves establishing a clear regulatory framework for crypto asset distributions. Atkins also stated that the SEC will consider using exemptions and other authorities during the rulemaking process to prevent outdated regulations from hindering innovation.
Furthermore, the staff of the Division of Investment Management issued a no-action letter (NAL) stating that it would not recommend enforcement action against registered advisers or regulated funds for maintaining crypto assets with certain state-chartered financial institutions. This provides clarity for registered advisers and regulated funds regarding permissible custodians for crypto assets.
