Financial giant Citadel suggests strict regulation on DeFi, DeFi giants jointly counter

On December 13, traditional financial giant Citadel Securities recently submitted a letter to the U.S. Securities and Exchange Commission (SEC) suggesting that stricter regulation should be applied to DeFi, and that traditional exchange and broker-dealer rules should be applied to activities involving tokenized securities trading on DeFi platforms, to avoid granting a 'regulatory exemption' to the tokenized market.

This view has sparked intense backlash in the crypto community. In a new letter to the SEC signed by DeFi Education Fund, Andreessen Horowitz (a16z), DigitalChamber, Orca Creative, attorney J.W. Verret, and Uniswap Foundation, it stated that Citadel's suggestion is too vague, treating decentralized protocols as traditional intermediaries, which could stifle innovation and limit the development of open finance. Organizations such as the Blockchain Association have also called for regulators not to equate software developers with financial intermediaries, warning that such positions could undermine the United States' competitiveness in the field of blockchain innovation.

Currently, this controversy is becoming one of the focal points in the SEC's public consultation process, with the industry widely concerned about how regulators will find a balance between protecting investors and promoting technological innovation.