United States Securities and Exchange Commission Commissioner Hester Peirce has taken another swipe at her agency, criticizing the regulator’s guidance on crypto custody while calling for more interaction with the public.

Speaking at the annual SEC Speaks Conference on April 2, Peirce — also known by crypto enthusiasts as “Crypto Mom” — said that a “particularly pernicious weed” had sprung up in the SEC’s “secret garden” of policy guidelines. Her comments were made in response to the controversial Staff Accounting Bulletin 121 (SAB 121).

In March 2022, the SEC issued SAB 121, which outlines the regulator’s accounting guidelines for institutions looking to custody crypto assets. Notably, SAB 121 prevents many banks from custodying crypto assets on behalf of clients.

Peirce noted that SAB 121 — issued without input from the banking sector — does not protect investors; instead, keeps out experienced banks and broker-dealers from the crypto custody business due to its capital implications.

“It is driving broker-dealers to allocate significant capital to their crypto custody businesses or to avoid the business altogether. SAB 121 arguably does not protect investors.”

Additionally, if the custodian fails, these assets could be treated as if they belong to the failed entity, not the customers of that entity, she added.

On March 1, the House Financial Services Committee voted in favor of a resolution that sought to overturn the bulletin. Republican Congressman Tom Emmer described SAB 121 as an “illegal” example of SEC Chair Gary Gensler’s “unrelenting prejudice towards the digital asset ecosystem.”