SEC’s Hester Peirce gives advice to crypto industry as frustration with agency grows 

Long-time crypto industry advocate SEC Commissioner Hester Peirce on Tuesday gave her normal spiel about her frustrations with how the agency is overseeing crypto companies

share

US Securities and Exchange Commission Commissioner Hester Peirce is once again taking a critical stance against how her colleagues communicate with and enforce actors in the digital asset space.  

In a speech given at the Practising Law Institute’s SEC Speaks event Tuesday, Peirce called out the controversial Staff Accounting Bill 121, introduced in March 2022, calling it “a particularly pernicious weed.”

SAB 121, which under securities law is not an official rule, states that crypto custodians should report a liability and “corresponding assets” on their balance sheets. 

Read more: SEC staff call for crypto entities to show liability on balance sheet

“The Commission has not published that framework or any subsequent staff efforts to clarify the framework’s scope, but many auditors and broker-dealers are treating it as binding,” Peirce said. “It is driving broker-dealers to allocate significant capital to their crypto custody businesses or to avoid the business altogether.”

SAB 121 is intended to guard against the “significant risks and uncertainties associated with safeguarding crypto assets,” SEC staff said at the time.  

Congress has also taken note of the guidance. Earlier this year, the Government Accountability Office (GAO) found that the SEC had failed to follow the Congressional Review Act (CRA) when it issued SAB 121. The SEC later countered that SABs are not subject to follow CRA since they are not official rules. 

Sen. Cynthia Lummis, R-Wyo., and Reps. Mike Flood, R-Neb., and Wiley Nickel, D-N.C., issued a joint resolution in February to repeal the SEC’s Staff Accounting Bill (SAB) 121. 

Read more: Bipartisan Congressional group tries to repeal controversial SEC crypto custody policy 

Peirce on Tuesday also offered advice to market participants, who she said are growing increasingly frustrated with the “‘secret garden’ — the maze of staff guidance that serves to define practices across the securities industry in a way that may be inconsistent with a plain reading of the rulebook.” 

“Countless people have told me that they used to feel comfortable coming in and speaking with the Commission and its staff, but no more,” Peirce added. 

Read more: Crypto, it’s time to demand clarity from the courts

Those looking to “nudge the SEC in the right direction” should continue to engage with the Commission, Peirce said, recommending that businesses and company leaders keep a record of all SEC meetings, come prepared with an agenda and supporting materials and coordinate messages with others across the industry, when possible. 

“Do not be a stranger and do not give up,” Peirce said. “Carefully consider what the staff is saying. If you do not see a strong legal justification for stopping your idea, do not give up.”


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research

article-image

The platform also rolled out 13 tokenized funds for institutions on the Connect platform

article-image

The company’s expanded lineup introduces new ETF products, as more and more issuers get into crypto funds

article-image

President Donald Trump announced a 10% levy on almost all goods and additional tariffs on so-called “worst offending” countries

article-image

Solana may be in “recomposition” mode, as new protocols put usefulness ahead of mere virality

article-image

The stablecoin issuer will have to contend with bigger players and the interest rates environment

article-image

The president reportedly was still working on his tariff policy plans late Tuesday evening