Citadel urges the SEC to tighten regulation of tokenized stocks on DeFi platforms, criticized by crypto lobbying groups

According to Mars Financial, Cointelegraph reports that in a letter sent to the SEC earlier this month, Citadel urged the SEC not to grant broad exemptions to DeFi platforms and not to allow these platforms to trade tokenized U.S. stocks, arguing that such platforms are likely to be classified as “exchanges” or “broker-dealers” regulated under securities laws. In response, cryptocurrency lobbying groups such as Andreessen Horowitz, the Uniswap Foundation, the DeFi Education Fund, and the Digital Chamber of Commerce sent a letter back to the SEC, opposing Citadel Securities’s request for the SEC to tighten the regulation of tokenized stocks in the DeFi sector. “Citadel’s letter is based on a misinterpretation of securities laws, attempting to extend the SEC’s registration requirements to any entity that has even the most indirect connection to DeFi trading.” Additionally, they agree with Citadel’s goal of protecting investors and maintaining market integrity but disagree that “achieving these goals always requires registering as a traditional US SEC intermediary; in some cases, carefully designed on-chain markets may not meet these objectives.” The letter also criticized Citadel’s characterization of autonomous software as an intermediary, arguing that autonomous software cannot be considered an “intermediary” in financial transactions because it “is not a person capable of exercising independent judgment or discretion.”