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:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

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 Report Templates.jpg

Research

Figure, founded by former SoFi CEO Mike Cagney, has emerged as a leader in onchain RWAs, with ~$17.5B publicly tokenized. The platform’s ecosystem volume is growing ~40% YoY as it expands beyond HELOCs into student loans, DSCR loans, unsecured loans, bankruptcy claims, and more. Operationally, Figure cuts average loan production cost by ~93% and compresses median funding time from ~42 days to ~10, creating a durable speed-and-cost advantage.

article-image

The Ethereum co-founder suggested LINEA holders would be eligible for other airdrops in cryptic tweet

article-image

The layer-2’s biggest release yet brings benefits — but a post-upgrade outage caused a chain reorg

article-image

Crypto is shifting into risk-on mode — pump.fun dominates meme activity, while Lido leans on treasury maneuvers

article-image

If the president breaks the Fed, he’ll own the budget problems

article-image

Combining Franklin Templeton’s tokenization expertise with Binance’s trading infrastructure could speed crypto adoption, companies say

article-image

The firm’s upcoming filing comes as competition heats up over the USDH stablecoin