Hester Peirce has left the U.S. Securities and Exchange Commission, removing the agency’s most persistent internal advocate for a tailored cryptocurrency rulebook just as it weighs its first dedicated crypto rulemaking proposal. Her departure on Oct. 2 leaves Chair Paul Atkins and Commissioner Mark Uyeda as the SEC’s only sitting members, creating a two-person commission in which a disagreement can stall major action.
Peirce’s exit also leaves the SEC’s crypto task force without its named leader. Uyeda, then serving as acting chair, appointed Peirce to lead the group on Jan. 21, 2025, directing it to develop clearer paths for registration, custody, token classification and other issues that had previously been addressed largely through enforcement cases.
The White House has not named a successor for Peirce or announced who will take over the task force. That uncertainty comes before an Oct. 20 deadline for public comments on the SEC’s proposed “Regulation Crypto Assets” framework, which could establish exemptions for certain token offerings and define categories of crypto assets that fall outside the federal definition of an investment contract.
a two-member sec raises the stakes for pending crypto rules
The SEC can continue operating with fewer than three commissioners under a 1995 rule, according to the agency’s governing framework. Yet a two-member commission has little room for division. Atkins and Uyeda, both Republicans, would need to agree on consequential Commission-level actions requiring a majority vote. A split decision, recusal or absence could delay proposals, exemptions and final rules.
That places greater attention on the Regulation Crypto Assets proposal, issued Aug. 18 through a written vote by Atkins, Peirce and Uyeda. The proposal was approved without opposition while Peirce remained in office.
Under the proposal, a startup exemption would permit a one-time fundraising amount of up to $5 million over four years. A separate financing exemption would allow up to $75 million every 12 months. The SEC also proposed treating certain crypto assets as outside the “investment contract” category, a classification that would determine whether securities laws apply.
The draft framework would preempt state-level registration and qualification requirements for covered offerings. Its comment period is scheduled to close Oct. 20, after which the SEC would need to decide whether to revise, advance or abandon the proposal.
Peirce’s departure does not automatically stop the rulemaking. It does, though, remove a commissioner who had consistently pressed the SEC to replace case-by-case enforcement with published standards for token issuers, trading venues and decentralized-finance protocols.
peirce opposed enforcement-led crypto policy
Peirce joined the SEC in January 2018 after serving as senior counsel on the Senate Banking Committee and as a senior research fellow at George Mason University’s Mercatus Center. During much of her tenure, she became known in crypto policy circles as “Crypto Mom,” a label tied to a series of dissents and public statements challenging the agency’s approach.
Her first prominent crypto dissent came in July 2018, after the SEC rejected a proposed Bitcoin exchange-traded fund from Cameron and Tyler Winklevoss. Peirce argued that the proposal met the relevant requirements of the Securities Exchange Act of 1934 and should have been approved.
Bitcoin ETF applications remained a recurring issue during her time at the Commission. Peirce later argued that the SEC had imposed unusual hurdles on crypto-linked exchange-traded products and had spent years rejecting proposals without providing a workable path to approval. The SEC ultimately approved spot Bitcoin ETFs in 2024, though Peirce criticized the length of the process and said it had consumed agency resources and weakened public confidence.
In 2020, Peirce proposed a “safe harbor” that would give token developers three years to build a functional or decentralized network before facing full securities-registration obligations. Her updated Safe Harbor 2.0 proposal, published in April 2021, included semiannual disclosures and an exit report requirement. The Commission never adopted it.
After Gary Gensler became SEC chair in 2021, the agency pursued many crypto-related questions through enforcement actions rather than dedicated rules for token offerings, decentralized finance or crypto exchange registration. Peirce repeatedly described that approach as regulation by enforcement.
She also dissented from the SEC’s 2021 settlement with DeFi Money Market, questioning whether the agency was allocating its resources effectively and warning that litigation could establish broad precedents without clear rules.
task force coincided with a softer litigation posture
The crypto task force led by Peirce marked a visible change in the SEC’s approach after the 2025 leadership transition. In its launch announcement, the agency said it had relied largely on after-the-fact enforcement and could provide more workable paths for businesses seeking to comply.
The task force identified 10 priority areas, including the definition of a security, crypto custody standards, tokenization and registration pathways. It held public roundtables and sought industry input on how securities rules should apply to blockchain-based systems.
During the same period, the SEC changed course in several major crypto disputes. In February 2025, the agency and Binance jointly requested a pause in their case. The SEC later agreed to dismiss its Coinbase lawsuit, filing a dismissal with prejudice on Feb. 27. On March 3, the SEC agreed to dismiss its case against Kraken; the company said the outcome involved no admission of wrongdoing, no penalty and no operational changes. The SEC and Binance jointly moved to dismiss their case with prejudice on May 29.
Bloomberg reported in early March that the SEC had dropped or paused at least nine crypto-related cases within roughly a month. The Consensys case was dismissed, while Robinhood Crypto said the SEC had closed its investigation.
custody and tokenized securities proposals remain active
Peirce leaves as several other crypto-related measures move through the SEC’s process. A custody proposal released Oct. 1 would, under specified conditions, allow investment advisers and regulated funds to self-custody crypto assets and use state trust companies as custodians.
A separate transfer-agent modernization proposal, issued Sept. 1, would permit blockchain or other distributed-ledger systems to serve as a master securityholder file or part of the required record. It would be the first substantial update to transfer-agent rules in more than 40 years. Firms using blockchain systems for tokenized securities would need to retain wallet addresses in position records, though the proposal does not decide whether any specific crypto asset is a security.
The SEC also issued a temporary “Innovation Exemption” on Sept. 17 for qualified tokenized-securities venues. The five-year conditional order would allow automated market makers and liquidity pools to facilitate secondary-market trading in tokenized NMS stocks, subject to volume limits and eligibility tiers.
With Congress yet to pass the CLARITY bill, which would assign more explicit responsibilities between the SEC and Commodity Futures Trading Commission, the agency’s pending rulemakings carry unusual weight. Peirce’s absence leaves those efforts in the hands of a smaller Commission and without the official who spent years arguing that crypto markets needed clearer rules before enforcement cases defined the boundaries.
See how evolving U.S. rules shape bitcoin’s path in 2025 in our analysis: future of crypto regulation in the US.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
