U.S. SEC’s steadiest crypto advocate, Hester Peirce, to depart next week

The U.S. Securities and Exchange Commission’s longtime ally of the crypto industry, Commissioner Hester Peirce, has set a departure date for next week, marking an end to a long era in which she sought clear rules for the sector — even during the years in which the agency refused to consider crypto regulations and pursued an array of legal actions.

Her final day is Oct. 2, according to a resignation letter she posted Friday on social media site X, which emerged even as the SEC was posting yet another piece of crypto policy work meant to clear up lingering questions on how the agency is defining tokens and its expectations for how projects are marketed.

Peirce, often known as “Crypto Mom” by digital assets insiders, pushed for years to get industry regulations during the chairmanships of Republican Jay Clayton and Democrat Gary Gensler — both of whom pursued aggressive crypto enforcement agendas. She finally got a chance to work on rules during the administration of President Donald Trump. She got started even before the arrival of current Chairman Paul Atkins, having been put in charge of the SEC’s new Crypto Task Force last year.

Her crypto work included a wide range of policy statements and guidance that clarified the agency’s position on various aspects of the industry, including mining, staking, memcoins and — most importantly — a series of definitions for classifying different types of crypto assets and which regulator would have dominion. More recently, the agency began proposing formal rules, beginning with one known as Regulation Crypto Assets, which set up a system for offering crypto assets without triggering stringent securities regulations.

The agency’s biggest splash, though, may have been its recent opening of the pathway for tokenizing securities. The effort known as the “innovation exemption” is meant to launch the tokenized securities era in a limited, five-year approach that will inform plans for eventual agency rules that make it more permanent.

“Maximizing people’s freedom to choose what is best for themselves and their families within sensible regulatory parameters designed to give them the confidence to transact with others is a delicate and vitally important task for the regulator,” Peirce, who’s going to be an associate professor at Regent University School of Law, wrote in her resignation.

Peirce acknowledged her nickname, “Crypto Mom,” in a 2019 speech during the industry-resistant era at the agency, and she also noted the agency had “hindered innovation and growth,” saying, “The only guidance out of the SEC is a parade of enforcement actions and a set of staff guidance documents and staff no-action letters.”

Her departure will leave the commission with just two members — Atkins and Republican appointee Mark Uyeda. The agency’s rules allow for two members to act as a quorum in times the commission is shorthanded. To date, Trump’s White House has declined to name Democratic nominees to the SEC or its sister agency, the Commodity Futures Trading Commission. It’s unclear whether Trump will now seek to fill vacancies.

On Friday, the agency added to Peirce’s legacy with additional efforts to define crypto assets and how a crypto project’s managerial expectations fit into those classifications. It issued a frequently-asked-questions document to provide answers on several points.

Among them, the agency staff said that the industry has asked how to avoid triggering consideration as “essential managerial efforts” when marketing tokens, adjusting a project’s software or taking other actions.

The series of highly technical questions also addressed “staking receipt tokens” and when a secondary market might be considered a “promoter” of an investment contract.