Citadel irritates the crypto community by asking the SEC to regulate DeFi like brokerages

Source: PortaldoBitcoin Original Title: Citadel irritates crypto community by asking SEC to regulate DeFi like brokerages Original Link: The clash between traditional members of the economy and the cryptoasset sector has gained a new chapter: Citadel Securities, a traditional liquidity provider, sent a letter to the US Securities and Exchange Commission (SEC) requesting that decentralized finance platforms (DeFi) be made to follow the same rules as stock exchanges and brokerages.

“Granting a broad exemption to facilitate the trading of a tokenized security through DeFi protocols would create two separate regulatory regimes for trading the same security,” the letter states.

Furthermore, Citadel Securities claims that different rules for DeFi platforms would “favor one technology to the detriment of all others.”

The company’s argument is that many DeFi protocols are, in practice, stock exchanges because they use non-discretionary methods, such as algorithms, to match buyers and sellers. Others would be brokerages because they receive compensation based on transactions.

“Realizing the potential benefits of tokenization requires applying the fundamental principles and investor protections that underpin the fairness, efficiency, and resilience of US equity markets,” the letter added.

DeFi sector reacts

After the letter was sent, important figures in the crypto sector protested. The founder of a certain DEX, Hayden Adams, accused the company’s CEO, Ken Griffin, of “coming after DeFi” by pushing for such recommendations to the agency for years.

“It makes sense that the king of TradFi’s shadowy market makers doesn’t like open source and peer-to-peer technology that can lower the barrier to liquidity creation,” said Adams.

The CEO of the Blockchain Association, Summer Mersinger, also contested the letter, calling on the SEC to reject Citadel’s “overly broad and impractical” approach.

“Regulating software developers as if they were financial intermediaries would harm US competitiveness, push innovation overseas, and do nothing to promote investor protection.”