Citadel Securities has stirred controversy after asking the US Securities and Change Fee (SEC) to implement tighter controls on decentralized finance (DeFi) platforms that commerce tokenized shares.
In a letter despatched to the SEC, the buying and selling agency mentioned that builders, smart-contract creators, and self-custody pockets suppliers shouldn’t obtain “broad exemptive reduction” for actions involving tokenized US equities.
Citadel argued that these platforms function in methods much like regulated exchanges or broker-dealers and ought to be handled as such below securities regulation.
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The corporate’s letter famous that permitting DeFi-based inventory buying and selling below lighter guidelines may cut up the market into two methods, one regulated and one not, for a similar asset. It said:
Granting broad exemptive reduction to facilitate the buying and selling of a tokenized share by way of DeFi protocols would create two separate regulatory regimes for the buying and selling of the identical safety.
It added that this strategy would contradict the “technology-neutral” precept of the Change Act.
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founder Hayden Adams responded on X that it “is smart the king of shady TradFi market makers doesn’t like open supply, peer-to-peer tech that may decrease the barrier to liquidity creation”.
Lawyer and Blockchain Affiliation board member Jake Chervinsky additionally commented, “Whoever thought Citadel could be in opposition to innovation that removes predatory, rent-seeking intermediaries from the monetary system?”
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