SEC Commissioner Hester Peirce has reaffirmed that individuals have the right to hold their own cryptocurrencies and maintain financial privacy. Speaking on The Rollup podcast, she said people should not be forced to rely on third parties for asset custody.
Hester Peirce, commissioner of the U.S. Securities and Exchange Commission (SEC) and head of the Crypto Task Force, described self-custody as a basic right. She said,
“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 also said online financial privacy should be the norm.
“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 added.
Delay in Crypto Market Legislation
The Digital Asset Market Structure Clarity Act, which includes rules for self-custody, anti-money laundering, and asset classification, has been delayed until 2026, according to Senator Tim Scott.
This delay affects how crypto transactions and privacy rules may be applied in the U.S. Crypto holders seeking to control their own assets now face uncertainty about upcoming SEC regulations.
ETFs Affect Self-Custody Trends
Some Bitcoin holders are shifting from self-custody to exchange-traded funds (ETFs) for easier management and tax advantages. Dr. Martin Hiesboeck, head of research at Uphold, said,
“We are witnessing the first decline in self-custodied Bitcoin in 15 years.”
Hiesboeck explained the shift followed the SEC’s approval of in-kind creations and redemptions for crypto ETFs. This allows holders to exchange crypto for ETF shares without triggering taxes, unlike cash-settled ETFs. The move departs from the “not your keys, not your coins” approach that many consider core to Bitcoin.
Notable Investors Turn to ETFs
Bitcoin analyst PlanB, creator of the BTC stock-to-flow model, moved his holdings to ETFs earlier this year to reduce the difficulty of managing private keys. His decision caused concern among some in the Bitcoin community, who questioned whether using ETFs aligns with Bitcoin’s original principles.
The trend shows that while self-custody remains a legal right, convenience and tax benefits are leading some investors to shift to ETFs, even if it contrasts with traditional crypto practices.
