DeFi groups fire back against Citadel Securities’ call for ‘flawed’ SEC tokenization rules

Decentralized finance (DeFi) proponents, including the DeFi Education Fund and Andreessen Horowitz, are contesting Citadel Securities’ call for the SEC to impose stricter regulations on DeFi intermediaries involved in tokenized securities. They argue that Citadel’s analysis misinterprets securities laws and would inappropriately extend registration requirements to entities with minimal involvement in DeFi transactions. The debate arises as the SEC seeks to balance innovation with investor protection in the rapidly evolving tokenization landscape, where real-world assets are increasingly represented on blockchain. Citadel maintains its support for tokenization but emphasizes the importance of investor safeguards, while DeFi advocates assert that the decentralized nature of their systems makes traditional intermediary-based regulations impractical. The SEC recently issued a no-action letter allowing the Deposit Trust Company to offer a tokenization service for custodied real-world assets, signaling a cautious approach to the technology.

(Source：The Block)