Billionaire Ken Griffin had the managing director of his market-maker Citadel write a stern letter to the SEC detailing why SEC exemptions for DeFi change and broker-dealer compliance are a horrible concept.
It could be a lot better — for Fundamental Avenue buyers, after all, not only for Citadel’s earnings — if the SEC would restrict its exemptive aid to DeFi, comply with its formal notice-and-comment rule-making processes, and apply the statutory definitions of “exchange” and “broker-dealer” to many DeFi exchanges.
In line with Citadel’s characterization, exemptive aid to DeFi would create a two‑tier regulatory regime for a similar securities and undermine core investor protections.
“This outcome would be the exact opposite of the technology-neutral approach taken by the Exchange Act,” Citadel wrote, “and would instead preference one technology over all others.”
DeFi cheerleaders critique Citadel’s arguments
Simplistic views of Griffin from the crypto trade forged him as a villain who makes use of his quantitative buying and selling large to extract cash from on a regular basis buyers.
Griffin famously outbid an ill-conceived decentralized autonomous group in buying a uncommon copy of the US Structure and earned quick ire from dissatisfied crypto merchants.
This week, Jake Chervinsky of the Blockchain Affiliation voiced his opposition to Citadel’s SEC request. “Who ever thought Citadel would be against innovation that removes predatory, rent-seeking intermediaries from the financial system?”
NYU Stern adjunct professor Austin Campbell echoed these ideas. He claimed Citadel was merely cloaking an try to guard its funds for order circulation from DeFi.
Lastly, Frank Chaparro summarized sarcastically, “Citadel Securities thinks any DeFi protocol that facilitates trading of tokenized securities ‘undermines’ US regulatory framework by acting as an exchange.”
Citadel has been opposing SEC exemptive aid to crypto all through 2025.
As early as July, Aleksander Polzer argued to the SEC that Citadel’s opposition to DeFi focsed on “self-preservation and a desire to maintain its market dominance.”
