TechFlow news, December 13 — Recently, traditional financial giant Citadel Securities submitted a letter to the U.S. Securities and Exchange Commission (SEC), recommending stricter regulation of DeFi. It proposed applying traditional exchange and broker-dealer rules to tokenized securities activities on DeFi platforms, avoiding "regulatory exemptions" for tokenized markets.
This view has quickly triggered strong backlash within the crypto community. A new letter addressed to the SEC, jointly signed by the DeFi Education Fund, Andreessen Horowitz (a16z), DigitalChamber, Orca Creative, attorney J.W. Verret, and the Uniswap Foundation, argues that Citadel's proposal is overly broad and treats decentralized protocols as traditional intermediaries, potentially stifling innovation and limiting the development of open finance. Organizations such as the Blockchain Association have also urged regulators not to equate software developers with financial intermediaries, warning that such positions could undermine U.S. competitiveness in blockchain innovation.
The debate has now become one of the focal points during the SEC’s public comment period, with the industry widely watching how regulators will strike a balance between investor protection and technological innovation.
