Crypto groups join forces to fight back against Citadel, criticizing its tokenization regulatory claims as "flawed"

Several DeFi and crypto groups - including DeFi Education Fund, a16z, The Digital Chamber, Uniswap Foundation and others - have written to the SEC criticizing Citadel Securities' position last week of requiring the SEC to strictly define "all intermediaries in tokenized U.S. stock transactions", calling its analysis "flawed" and misrepresenting the facts.
The crypto industry pointed out that Citadel had sought to extend the SEC registration requirements to any entity "slightly connected" to DeFi transactions, mistakenly treating the decentralized protocol as an "exchange or broker" in the traditional sense. They stressed that DeFi, which is run by autonomous software and has no physical asset custody intermediary, should not be brought under the same regulatory framework.
Citadel responded by saying that it supported the asset chain, but not at the expense of long-established investor protections in US capital markets, further escalating tensions between the two sides.
The SEC has continued to signal support for innovation and compliance, and on Friday issued a no-action letter to DTC, allowing it to tokenize assets under custody, including Russell 1000 constituents, major U.S. stock index ETFs, and U.S. Treasuries.