DeFi industry calls Citadel's 'call for stricter regulation of tokenized securities' a "distortion of facts and defense of vested interests"

After Citadel Securities submitted a comment letter arguing that strong regulation should be applied to decentralized finance (DeFi) that handles tokenized securities, the DeFi industry directly refuted it as "baseless claims."

On the 12th (local time), according to CoinDesk, the DeFi Education Fund, Andreessen Horowitz (a16z), Digital Chamber, the Uniswap Foundation and others submitted a joint letter to the U.S. Securities and Exchange Commission (SEC) stating, "We agree with the goals of investor protection and market order, but we cannot agree that achieving this requires registering DeFi like traditional intermediaries."

Earlier, Citadel submitted a 13-page comment letter arguing, "DeFi that handles tokenized securities is effectively performing the role of an exchange or broker," and that "the same regulatory framework as SEC registration should be applied." The DeFi industry countered, "On-chain markets can sufficiently achieve investor protection and market transparency depending on their design," and "regulating them on the same level as traditional financial intermediaries is an approach that ignores technical characteristics."

In particular, the DeFi industry pointed out that Citadel's claims include distortions of fact and misunderstandings. Jennifer Rosenthal, spokesperson for the DeFi Education Fund, said, "It is a very convenient stance for Citadel to take issue with the mere existence of a technology that could threaten its business and large market share," adding, "It appears to be an intent to protect existing vested interests rather than technological innovation."

Citadel Securities responded, "While we support tokenization and digital financial innovation, the strong investor protections that made U.S. capital markets the global standard must not be sacrificed," and they are maintaining their position.