Citadel writes to U.S. SEC…"Regulation on tokenized stocks should be strengthened"

Global major market maker (MM) Citadel Securities submitted to U.S. authorities the opinion that regulation on tokenized stocks should be strengthened.

On the 4th (local time), industry sources said Citadel Securities sent a letter to the U.S. Securities and Exchange Commission (SEC) on the 2nd urging stronger regulation of tokenized stocks. In the letter, Citadel Securities said, "Decentralized trading protocols should be distinguished as intermediaries involved in trading tokenized U.S. stocks," and "(The SEC) should refrain from granting 'broad exemptive relief' to those seeking to facilitate trading in tokenized stocks."

Citadel Securities pointed out that decentralized finance (DeFi) platforms are likely to fall under 'exchanges' or 'brokers' under current law. In that case, DeFi platforms that provide tokenized stock trading services should be subject to U.S. securities law, Citadel Securities said. Citadel Securities said, "Many DeFi platforms, called 'decentralized exchanges (DEXs)', connect buyers and sellers when trading tokenized stocks, which fits the definition of an 'exchange,'" and "Denying this would seriously undermine the existing regulatory framework that protects investors and ensures market integrity and resilience."

The U.S. crypto industry immediately objected. Summer Mersinger, CEO of the Blockchain Association, issued a statement saying, "Regulating software (SW) developers like financial intermediaries would weaken U.S. competitiveness and push innovation overseas," and "(Stronger regulation) would not contribute at all to investor protection."