“Crypto Mom” Hester Peirce Exits, SEC Regulation Enters a Two-Commissioner Era

Original | Odaily (@OdailyChina)

Author｜jk

On October 2 local time in the United States, "Crypto Mom" Hester Peirce left the U.S. SEC, officially stepping down from her role as commissioner. She will next head to Regent University School of Law to teach. Behind her, the SEC is left with only Chairman Paul Atkins and Commissioner Mark Uyeda, both Republicans, as the SEC officially enters the "two-person era."

Looking back on these eight years, it was less a term in office than a long-running debate: Peirce started from the position of a minority of one, became a lone supporter of the crypto industry, and bit by bit turned her positions into the blueprint for today's crypto industry rules.

Before 2022: A Minority of One

Peirce was sworn in on January 11, 2018. Previously, she served as senior counsel on the Senate Banking Committee and as a senior research fellow at George Mason University's Mercatus Center.

Hester Peirce's photo on the SEC official website, source: SEC

On July 26 of that year, the SEC once again rejected the Winklevoss brothers' Bitcoin ETF application. Peirce promptly issued a dissenting statement, arguing that the relevant rule change complied with the Securities Exchange Act of 1934 and should be approved under precedent. The crypto community remembered this dissent and gave her the nickname "Crypto Mom."

In 2020, she proposed a plan to give developers three years to build functional or decentralized networks without immediately applying full securities registration requirements. On April 13, 2021, she released Safe Harbor 2.0, adding requirements for semi-annual disclosure updates and exit reports. The plan ultimately did not win committee approval. But it did not disappear because of that — corporate lawyers treated it as a reference framework for designing token issuance structures and cited it repeatedly.

After 2021, Gary Gensler became chairman, and the SEC did not issue rules for token issuance, DeFi protocols, or crypto exchange registration, instead advancing through enforcement actions. Peirce called this approach "regulation by enforcement," and similar criticism can be traced back to 2020.

According to reports, she dissented in the 2021 DeFi Money Market settlement, arguing that some of the projects pursued were failed experiments rather than fraud. When the SEC sued companies such as Coinbase, Kraken, Nexo, and Ripple, she publicly questioned whether it was worth devoting resources to these lawsuits, and worried that it would crowd out other work of the agency and leave improper precedents.

A retrospective article by The Defiant argued that between 2022 and 2023, she was the only person on the commission who was supportive of crypto and also held voting power, and compliance lawyers could only rely on reading her dissents as a substitute for official guidance.

2024: A Long-Delayed Approval

The Bitcoin ETF was another thread running through her tenure. She criticized in speeches that the SEC had refused constructive communication with crypto users and developers for four consecutive years, and added special thresholds for crypto assets in ETF approvals.

In 2024, spot Bitcoin ETFs were finally approved. But in her dissent at the time, she focused more on the long delay that preceded it: she believed the SEC had wasted a decade, damaged public trust, consumed staff resources, blurred the agency's role, and alienated a generation of product innovators from the SEC. The industry believes that her early dissents paved the way for this approval as well as the SEC's softening stance toward meme coins and developer activity in 2025. It is not hard to understand why many people are willing to remember her this way.

Hester Peirce at the Bitcoin Conference

That same year, the White House changed hands, the upper channels for the crypto industry were opened, and the SEC also welcomed a new leader.

2025: From Minority to Leader

On January 21, Acting Chairman Mark Uyeda announced the creation of a crypto task force and appointed Peirce as its head.

When the task force was established, the SEC's statement candidly acknowledged that it had previously relied mainly on enforcement to regulate crypto in a retrospective and passive manner, and that in providing viable options for those seeking registration, the SEC "can do better."

A photo of Hester Peirce at an event

The task force subsequently listed ten priority areas, including defining securities attributes and custody solutions, held public roundtables, rescinded previous bank custody guidance, and added industry participants to provide input on tokenization and exchange rules. She calls herself a "liberty-maximalist," and has also said that many meme coins are "likely outside the SEC's jurisdiction," and suggested that Congress and the CFTC handle the issue.

During her time as head of the crypto task force, the SEC's enforcement stance toward the crypto industry shifted markedly. In February 2025, the SEC first jointly filed with Binance to pause litigation, then agreed to dismiss its lawsuit against Coinbase, and on February 27 submitted a dismissal request with prejudice. On March 3, the SEC also agreed to dismiss its lawsuit against Kraken, which said the outcome did not involve an admission of wrongdoing, fines, or business changes. On May 29, the SEC and Binance jointly filed to dismiss, also with prejudice.

According to Bloomberg, in the month leading up to early March, the SEC had dismissed or shelved at least nine cases against crypto companies. The Consensys case was also dismissed, and Robinhood Crypto announced that the SEC had ended its investigation into it. The dismissal documents in the Coinbase and Binance cases both cited the ongoing work of the crypto task force as the reason. Although the dismissals were an overall SEC decision and not Peirce's achievement alone, the resolution of these cases not only bore her imprint but also brought a complete end to the "regulation by enforcement" approach she had criticized for years.

What She Left Behind, and What Remains Unfinished

Positions held for years are now turning into documents. It is widely believed that the thinking behind her earlier safe harbor can already be seen in the SEC's proposals, exemptions, and guidance. But most of this work is still in progress:

• Regulation Crypto Assets (token issuance rules): The SEC proposed this rule on August 18, featuring a one-time "startup exemption" of up to $5 million (within four years), and a "fundraising exemption" of up to $75 million every 12 months, and making crypto assets no longer regarded as the subject of an "investment contract." The proposal would also preempt state registration and qualification requirements, with the comment period closing on October 20. This is the SEC's first crypto-specific notice-and-comment rulemaking, proposed by Atkins, Peirce, and Uyeda via written vote, with no opposition. In a statement, Peirce said these exemptions and safe harbors cannot fit all models, and that this is just one step on the long road to a clear, reasonable, and enforceable regulatory framework.
• Custody rules: The SEC released a custody proposal on October 1, allowing investment advisers and regulated funds under certain circumstances to hold crypto assets themselves, and to use state trust companies as custodians, subject to certain conditions.
• Modernization of transfer agent rules: Proposed on September 1, this is the first substantive revision of transfer agent rules in more than 40 years. It allows transfer agents to use blockchain or other distributed ledgers as the primary securities holder file or a component thereof, but does not mandate their use; transfer agents using blockchain or handling tokenized securities need to store wallet addresses in their position detail records. However, the proposal does not determine whether a given crypto asset is a security.
• Innovation Exemption: On September 17, the SEC issued this temporary, conditional exemption order, allowing qualified tokenized securities venues to use automated market makers and liquidity pools to trade tokenized NMS stocks. The exemption period is five years, expiring on September 17, 2031, and can be shortened, extended, or adjusted by the SEC at any time; it is positioned as a "sandbox" to inform future rulemaking. Tier 1 stocks (such as S&P 500 and Russell 1000 constituents) are limited to 75 securities and trading volume not exceeding 0.25% of the previous month's average daily volume; Tier 2 is limited to 250 securities and 2.5%, and is restricted to secondary market trading only. The SEC is also seeking public comment on the exemption.

Variables in the Two-Person Era

Hester Peirce's second term expired in June 2025, and under the rules she could have continued to serve for about 18 months, meaning she left roughly two months earlier than the deadline.

The SEC she leaves behind has only two commissioners. A rule passed in 1995 allows the commission to continue operating with fewer than three commissioners, but with only two people acting, once there is disagreement or recusal, matters will stall. The White House has not yet nominated a successor, and there is no conclusion on who will succeed her at the crypto task force. At the congressional level, the CLARITY Act remains stuck in the Senate, and the industry lacks a comprehensive legislative framework dividing regulatory authority between the SEC and the CFTC. With legislation stalled, Regulation Crypto Assets has temporarily become the main vehicle for providing regulatory clarity in the near term. Some industry executives worry that rules lacking legal backing could be changed by a future administration.

Conclusion

Eight years ago, when Hester Peirce walked into the SEC, crypto was still like a body of water without navigational markers. She brought only one kind of inconvenient stubbornness: when everyone stood on the opposite side of the crypto industry, she still insisted on asking what good rules themselves should look like. And so, a dissent became a stone thrown into the water, a safe harbor became a sketch, and a long-held minority position became a signpost that later arrivals could cite again and again.

What "Crypto Mom" left behind in the field of industry regulation is not a completed building, but a drawn blueprint, a few freshly erected scaffolds, and a small path she walked step by step. The road does not yet have a name, the rules are not yet fully finalized, and the person to carry the baton has not yet appeared, but the waters of crypto are no longer as quiet as they were eight years ago.