Citadel Securities has stirred controversy after asking the US Securities and Trade 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 stated that builders, smart-contract creators, and self-custody pockets suppliers shouldn’t obtain “broad exemptive aid” for actions involving tokenized US equities.
Citadel argued that these platforms function in methods much like regulated exchanges or broker-dealers and must 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 might break up the market into two techniques, one regulated and one not, for a similar asset. It acknowledged:
Granting broad exemptive aid 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 method would contradict the “technology-neutral” precept of the Trade Act.
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founder Hayden Adams responded on X that it “is sensible 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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