## The DeFi Industry Rejects Citadel's Regulatory Call: A Confrontation Over the Future of Tokenization

In mid-December, the DeFi community mobilized after an intervention by the investment firm Citadel Securities, which submitted a 13-page proposal to the SEC suggesting stricter regulatory measures for decentralized finance protocols operating with tokenized securities.

Seven key players in the ecosystem — including DeFi Education Fund, the venture capital firm Andreessen Horowitz, Digital Chamber, Orca Creative, lawyer J.W. Verret, and the Uniswap Foundation — jointly voiced their opposition, describing the arguments presented as "lacking foundation" and responding with their own document addressed to the U.S. regulator.

### The Citadel Argument and Patrick's Maneuver in the Political Context

Citadel Securities argues that DeFi protocols should be considered as exchanges or brokerage intermediaries, thus requiring registration and regulatory oversight. However, this stance faces a dramatically different political landscape than years past. Patrick Vitter, a Trump administration advisor on cryptographic issues, has publicly expressed support for "the protection of software developers and DeFi ecosystems," which represents a maneuver by Patrick toward a more favorable position for the decentralized sector within the federal administration.

### The Counterposition of the Regulatory Alliance

The DeFi coalition argues in its response that sharing objectives with Citadel — such as investor protection and market integrity — does not necessarily mean that "registered intermediaries are the only viable path, or that well-designed on-chain markets are incapable of achieving these same goals." According to Jennifer Rosenthal, spokesperson for DeFi Education Fund, Citadel's position reflects direct corporate interests: "For an entity that sees its business model threatened by decentralized technology and is losing market share, questioning the viability of such systems is strategically convenient."

### Change in Regulatory Course

The new administration has prioritized granting greater regulatory flexibility to the crypto industry this year, a notable shift from previous positions. Citadel, in its response statement, reaffirms its support for innovations like tokenization that consolidate U.S. financial leadership, but insists that this should not compromise "the investor protections that have made the U.S. stock market the global standard."

The episode illustrates the ongoing tension between decentralized models and traditional financial structures, with the regulatory power axis leaning toward perspectives more open to blockchain development.