Crypto organizations team up to fight back against Citadel, criticizing its tokenization regulatory claims as "flawed"

Golden Finance reports that several DeFi and crypto organizations—including the DeFi Education Fund, a16z, The Digital Chamber, Uniswap Foundation, and others—jointly sent a letter to the SEC criticizing Citadel Securities’s recent request for the SEC to clearly define the stance on “all intermediaries involved in tokenized US stock trading.” They argued that the analysis “is flawed” and distorts facts.
The crypto industry pointed out that Citadel is attempting to extend the SEC registration requirements to any entity that is “somewhat related” to DeFi trading, wrongly categorizing decentralized protocols as traditional “exchanges or brokerages.” They emphasized that DeFi operates through autonomous software without actual asset custody intermediaries and should not be subjected to the same regulatory framework.
Citadel responded that it supports bringing assets onto the blockchain but cannot do so at the expense of investor protection, which has been established over the long term in the US capital markets. The tension between the two sides has thus further escalated.
Recently, the US SEC has continued to send signals supporting both innovation and compliance. On Friday, it issued a no-action letter to DTC, allowing it to provide tokenization services for custodial assets including Russell 1000 component stocks, major US stock index ETFs, and US bonds.