Several cryptocurrency groups have criticized Citadel Securities for urging the US Securities and Exchange Commission (SEC) to impose tighter controls on decentralized finance (DeFi) systems dealing with tokenized stocks.
Citadel had previously asked the SEC not to give DeFi platforms special permission to trade digital versions of US equities.
The firm argued that these platforms could fall under definitions such as “exchange” or “broker-dealer” and should therefore meet the same registration requirements as traditional financial firms.
Did you know?
Subscribe – We publish new crypto explainer videos every week!
Best Crypto Analysis Indicators Explained (Beginner-Friendly Animation)
In response, organizations including Andreessen Horowitz, the Uniswap
Foundation, the DeFi Education Fund, and The Digital Chamber sent a joint letter to the SEC. They said their aim was “to correct several factual mischaracterizations and misleading statements” made in Citadel’s submission.
The group claimed the company’s position would extend registration rules to almost any party involved in a DeFi transaction, even if their role was minimal.
They acknowledged that protecting investors and maintaining fair markets are important goals. However, they argued that these goals do not always require platforms to operate under traditional SEC registration.
They said that well-designed blockchain-based markets can meet the same standards of fairness and safety without the need for centralized intermediaries.
Furthermore, the group rejected Citadel’s claim that autonomous software acts as a financial “middleman”. They wrote that computer code cannot play such a role because it has no independent judgment or decision-making power.
Phong Le, CEO of Strategy, criticized Morgan Stanley Capital International’s plan to drop firms that hold most of their assets in cryptocurrency from its stock indexes. What did he say? Read the full story.
