What did SEC Commissioner Hester Peirce say about blockchain regulation?

Hester Peirce argued that securities laws should not automatically apply to blockchains, open-source software, or noncustodial tools. She said regulators should focus on activities and behaviour rather than the underlying technology itself.

Why does Hester Peirce's speech matter for the crypto industry?

Peirce's comments could influence how US regulators approach crypto oversight in the future. Her framework suggests that control, custody, and decision-making may matter more than simply operating blockchain infrastructure.

What is the main regulatory question raised by Peirce?

The key question is whether securities regulations should extend to neutral blockchain networks, software developers, validators, and noncustodial tools. Peirce argued that technology used for many purposes should not automatically be treated as a securities platform.

Could DeFi projects benefit from Peirce's approach?

Potentially, yes. Under Peirce's framework, truly decentralised protocols and noncustodial applications could face less regulatory pressure if there is no central party controlling assets or making decisions on behalf of users.

How could this affect blockchain developers and validators?

Peirce suggested that developers, validators, and node operators should not automatically be regulated like brokers or exchanges simply because they help operate blockchain networks. The focus would instead be on whether they perform securities-related functions.

Would centralised crypto exchanges still face SEC scrutiny?

Yes. Peirce indicated that firms holding customer assets, managing funds, or exercising discretion over transactions could still fall under securities regulations. Centralised crypto businesses would likely remain a key focus for regulators.

What is the difference between custodial and noncustodial crypto services?

Custodial services control or hold users' assets on their behalf, while noncustodial services allow users to maintain control of their own funds. Peirce's remarks suggest this distinction could become increasingly important in future regulation.

What are the main bull and bear arguments for crypto after this speech?

The bullish view is that a narrower regulatory approach could reduce uncertainty for DeFi projects, developers, and blockchain infrastructure providers. The bearish view is that Peirce is only one commissioner, and future SEC policies may not fully adopt her position.

Image for illustrative purposes only. Not a real photo.

Peirce questions SEC reach over blockchains

Written by Heidi Cuthbert Published Jun 4, 2026, 5:55 AM

SEC Commissioner Hester Peirce said securities laws should not automatically extend to blockchain networks, open-source code, or noncustodial software, framing crypto regulation as a question of where oversight boundaries should be drawn.

Speaking at the IC3 Blockchain Camp in Princeton, New Jersey, Peirce argued that regulators should distinguish between neutral blockchain infrastructure and activities that resemble traditional securities market functions.

“In some cases, the blockchain is used to perform functions similar to those performed by these intermediaries, but it is not clear that our rules should apply to the blockchain itself, given that blockchains are used to do many things other than transact in securities,”

Said SEC Commissioner Hester Peirce.

Peirce said the SEC’s existing framework was built around intermediaries such as brokers, dealers, exchanges and custodians, creating challenges when applied to systems designed to minimise reliance on those entities.

Her comments suggest that regulatory scrutiny should focus on who controls assets, exercises discretion, or performs securities-related functions rather than on the technology layer itself, a distinction that could affect DeFi projects, validators, node operators and software developers.

The commissioner also indicated that centralised crypto firms that hold customer assets or make decisions on behalf of users could remain subject to securities regulation even as decentralised and noncustodial systems receive different treatment.

Peirce urged the industry to strengthen audits, improve key management practices, enhance security protections and provide clearer disclosures around decentralisation, while defending users’ ability to transact through shared software without automatically triggering exchange registration requirements.