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SEC's Hester Peirce Defends Crypto Privacy as Core Liberty
Key Takeaways
- SEC’s Hester Peirce reaffirmed that self-custody of crypto is a fundamental individual right aligned with US freedom principles;
- Peirce argued that privacy in financial transactions should be the default, not seen as suspicious or anti-regulatory behavior;
- As crypto investors shift toward ETFs for tax ease, experts warn that this weakens the “not your keys, not your coins” ethos.
The US Securities and Exchange Commission (SEC) Commissioner Hester Peirce reaffirmed on November 29 that holding cryptocurrency privately, also known as self‑custody, is a basic individual right and aligns with foundational US freedom principles.
She emphasized she sees herself as a "freedom maximalist" during her discussion on the Rollup podcast. She noted that holding one's own assets could spark debate, particularly given the country's emphasis on personal liberty.
Peirce pointed out that keeping financial transactions private should not be viewed as suspicious. Instead, privacy ought to be the norm, not a red flag.
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Peirce's views also respond to shifts in the crypto industry where holders retreat from direct control of their assets.
Research by Dr. Martin Hiesboeck at Uphold showed the first drop in self‑custodied Bitcoin
This tendency was boosted when the SEC approved in‑kind creations and redemptions for crypto ETFs in July. That change allowed holders to exchange Bitcoin and ETF shares without triggering taxable events, contrasting with cash‑settled ETF structures.
Hiesboeck describes this shift as a departure from the "mantra of not your keys, not your coins". The trend stirred controversy over whether reliance on centralized custody undermines the core spirit of cryptocurrency.
On November 24, the SEC's Division of Corporation Finance provided a no-action letter to Fuse Crypto Limited. What did it say? Read the full story.