Self-custody and the privacy of financial transactions are vital rights that align with the values of freedom embedded in the foundation of the United States.
Hester Peirce, a commissioner at the U.S. Securities and Exchange Commission (SEC) and the leader of the SEC’s Crypto Task Force, reiterated the importance of the right to self-custody in cryptocurrency during her recent appearance on The Rollup podcast.
“I’m a freedom maximalist,” Peirce told The Rollup podcast. She emphasized that self-custody should be recognized as a fundamental human right. She questioned: “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 expressed the view that financial privacy online should be the norm. She criticized the current mindset that assumes those seeking transaction privacy must be up to no good, suggesting it should be viewed inversely.
These statements come amidst the postponement of the Digital Asset Market Structure Clarity Act, a legislative proposal affecting crypto markets, which includes provisions for self-custody and anti-money laundering regulations, now delayed until 2026 as reported by Senator Tim Scott.
ETFs Pose a Threat to Bitcoin’s Self-Custody Principle
Recent trends show that notable Bitcoin holders are increasingly shifting from self-custody solutions to exchange-traded funds (ETFs) to benefit from tax advantages and simplified crypto management.
Dr. Martin Hiesboeck, research head at Uphold, remarked on this tangible decline in self-custodied Bitcoin for the first time in 15 years. This shift is linked to the SEC’s approval of in-kind transactions for crypto ETFs, which enable holders to swap cryptocurrencies for ETF shares without tax repercussions.
“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, known for his contributions to Bitcoin analysis, disclosed his transition of Bitcoin holdings into ETFs, seeking relief from the complications of managing private keys. His decision ignited controversy within the Bitcoin community, as many raised alarms about abandoning fundamental custody principles in favor of third-party management.
