Overview
- Citadel Securities told the SEC that some DeFi systems, particularly those trading tokenized U.S. equities, fit legal definitions of exchanges or broker‑dealers and should face technology‑neutral oversight.
- The firm warned that letting tokenized stocks trade on DeFi could create a shadow equity market outside the national market system and urged regulators to reject broad exemptions.
- Uniswap founder Hayden Adams and crypto advocacy groups criticized the filing, saying it would misclassify developers, validators and front‑end operators as regulated intermediaries and would stifle permissionless innovation.
- Industry observers say adopting Citadel’s framework could force protocol teams, wallets, market makers, liquidity providers and DAO participants into registration, capital rules and best‑execution obligations.
- Traditional finance groups including SIFMA and the World Federation of Exchanges support equal treatment for tokenized and conventional securities, while the SEC continues to collect comments without taking formal action.