DeFi or Broker? Heated Debate Before the SEC Regulatory Gate

Question

[Crypto World] On December 13th, the US crypto policy circle was once again shaken. Hedge fund giant Citadel Securities submitted a 13-page open letter to the SEC, with a straightforward core demand: if DeFi protocols want to handle tokenized securities, they must be regulated and registered like traditional exchanges or brokerages.

As soon as the statement was released, industry leaders in DeFi couldn’t sit still. The DeFi Education Fund, a16z, Uniswap Foundation, Digital Chamber of Commerce, lawyer J.W. Verret, and other forces jointly responded, directly countering Citadel’s argument as “baseless.”

Where are the key points of contention? Citadel believes that if DeFi protocols handle tokenized securities trading, they are essentially acting as exchanges or brokerages and must comply with the same regulatory requirements—this logic sounds reasonable. However, industry representatives responded: you are oversimplifying the issue. The DeFi Alliance clearly pointed out that carefully designed on-chain markets can fully innovate while protecting investors, without necessarily applying the traditional SEC intermediary framework.

Interestingly, the White House’s stance is very clear. The new SEC leadership under the Trump administration has been easing restrictions on the crypto industry. White House crypto advisor Patrick Witte recently publicly stated on social media platform X that the office supports “the necessity of protecting software developers and DeFi.” This is clearly encouraging the industry.

Citadel emphasized in its statement that it supports tokenization innovation, but only on the premise that investor protection is not sacrificed—after all, this protection system is the core competitiveness of the US stock market. The implication is: I am not against innovation; I want innovation to be regulated.

Jennifer Rosenthal, spokesperson for the DeFi Education Fund, pointed out the crux sharply: “For Citadel, questioning the existence of a technology that threatens its business and significant market share is very convenient.” This hits the nail on the head—Citadel’s business model is being impacted by DeFi to some extent, which explains why it’s trying to impose regulatory shackles.

This game is far from over. On one side are traditional financial forces defending their territory; on the other are emerging DeFi forces fighting for survival, with government policy guidance in between. The next move by the SEC will directly influence the future of the US DeFi ecosystem.

WhaleWatcher · Accepted Answer

Citadel is trying to kill DeFi... The polite way to put it is regulation, but in reality, they just want to drag DeFi into the traditional financial framework.

MEVSandwichMaker · Answer

Citadel is causing trouble again. Are they really treating DeFi as a broker this time? Trying to define it with a 13-page letter? That's hilarious.

DegenDreamer · Answer

Citadel is starting to get active again, truly impressive. Still sticking to the old, outdated logic, insisting on forcing DeFi into traditional finance.

0xDreamChaser · Answer

Citadel just wants to monopolize. Can't stand DeFi rising, same old tricks.

NFTBlackHole · Answer

Citadel is trying to block DeFi, that's funny, huh?

It's easy to say when you're standing, but monopolizing traditional finance and wanting to control Web3 too.

a16z needs to take a hard stance this time; otherwise, in the future, everything will have to ask the SEC.

Wait, if regulation really happens like that, what's left of decentralization?

AirdropHustler · Answer

Citadel wants to cause trouble again? A 13-page letter trying to crush DeFi, dreaming too big, haha

Can DeFi and brokerages be the same? One is decentralized, the other centralized, how can they apply the same rules...

a16z is right to call them out, this is traditional finance trying to choke off innovation, I see through it

Tokenized securities are indeed blurry, but don’t rush to put shackles on DeFi

I’ve seen too many of Citadel’s tricks, used to short, now they’re back with the same play

Regulation is coming, so what if it does? At worst, use self-custody wallets for trading, you can’t control me

Their plans are loud and clear, but I’m just worried that DeFi might end up being completely trapped in the end

MercilessHalal · Answer

Citadel is really trying to crush DeFi, huh? Traditional finance can't stand us, so they're using this approach?

AirdropSkeptic · Answer

Citadel is still playing the old tricks, really thinking DeFi has to wear the exchange's coat to survive? Laughing out loud, decentralization just doesn't listen to your set of rules.