"Crypto Mom" Hester Peirce Officially Bids Farewell to the SEC Today! Crypto Reform Unfinished, Committee Reduced to 2 Members

Hester Peirce, a commissioner of the U.S. Securities and Exchange Commission (SEC) nicknamed "Crypto Mom" by the crypto industry, officially stepped down today (October 2), ending her over eight-year tenure since 2018.

SEC Chairman Paul Atkins and Commissioner Mark Uyeda issued an official farewell statement on October 1, particularly noting Peirce's long-standing advocacy for clearer regulation of digital assets and her opposition to handling the crypto industry through "enforcement instead of rule-making."

After Peirce's departure, the SEC's five-member commission is now left with only: Chairman Paul Atkins and Commissioner Mark Uyeda, both of whom are Republicans. Although the SEC's membership has dropped to two, current rules still allow two commissioners to constitute the minimum quorum, so the SEC will not come to a halt.

The Most Awkward Timing: Crypto Rules Just Entering a Period of Intense Reform

Peirce's departure is particularly noteworthy as the SEC is currently undergoing the most intensive phase of crypto regulatory reform in recent years.

Just a day before her official departure, the SEC proposed a new draft rule for crypto asset custody, aiming to establish a clearer framework for the custody of digital assets for registered investment advisors and funds, allowing self-custody under certain conditions and the use of some state-level trust companies as custodians.

Atkins stated that this is just part of the SEC's overall crypto regulatory reform. Over the past year, the SEC has progressively advanced several reforms, including a framework for classifying crypto asset securities, rules for tokenized securities, Regulation Crypto Assets, a crypto asset custody system, and the "Innovation Exemption" for tokenized U.S. stocks. Therefore, although Peirce is leaving, the work led by her crypto task force over the past year has not stopped.

Her Most Important Role: Changing "Enforcement" to "Rule-Making First"

Peirce's most representative stance over the years has been to demand that the SEC first establish clear rules before determining which crypto activities are violations. During the SEC's period of adopting a more aggressive enforcement approach towards the crypto industry, she publicly opposed some enforcement actions multiple times, advocating for the establishment of a dedicated regulatory framework for digital assets.

After 2025, she was further appointed to lead the SEC's crypto task force, beginning to formally translate her long-standing advocacy into policy. On September 17, the SEC had just launched the "Innovation Exemption," allowing qualifying platforms to trade tokenized U.S. stocks through on-chain systems and automated market makers within a limited scope.

Peirce described this measure as an important step for the U.S. market to prepare for future "on-chain trading of tokenized stocks."

On October 1, She Cast Her Last Vote on Crypto Policies Before Departing

More symbolically, Peirce participated in the SEC's crypto regulatory reform just a day before her departure. On October 1, she issued her last statement regarding the new crypto asset custody rules, pointing out that investment advisors have long lacked clear rules for crypto asset custody, and the new system attempts to provide a practical and legal path.

SEC Chairman Atkins stated on the same day that the current custody rules were established before the emergence of crypto assets and can no longer fully adapt to the current market, thus requiring a redesign of the regulatory framework for digital assets.

When Peirce leaves, the SEC's crypto reform is not over; it is entering the formal rule-making stage.

With Only 2 Members Left, Will This Slow Down Crypto Reform?

In the short term, the SEC will not lose its decision-making ability due to Peirce's departure. Even with a reduced number of commissioners, two can still constitute a quorum and vote; the remaining Atkins and Uyeda have generally aligned public positions on tokenization, crypto custody, and digital asset regulatory reform.

However, the two-member structure will make the SEC's governance more fragile. Normally, the SEC can have a maximum of five commissioners, and the law restricts any one political party to a maximum of three seats. Now with only two commissioners left, if either one abstains from voting or is unable to perform their duties, it could affect the advancement of some significant rules.

As of now, the White House has not publicly completed the new SEC commissioner nomination process.

The SEC's latest actions indicate that crypto regulatory reform continues to move forward. Atkins clearly stated on October 1 that the SEC's recent direction includes:

• Ending the primary reliance on enforcement as a regulatory model
• Establishing a classification system for crypto assets
• Launching rules for tokenized securities
• Opening experimental exemptions for on-chain stock trading
• Establishing a crypto asset custody framework

Moreover, "more regulatory proposals are still on the way." Therefore, Peirce's departure seems more like the loss of a long-time advocate for crypto reform rather than an immediate shift in SEC policy.

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