Citadel Securities tells SEC tokenized stocks need same rules as traditional securities

U.S. market maker Citadel Securities has strongly opposed regulatory exemptions for the DeFi trading of tokenized stocks in a comment letter submitted to the SEC, U.Today reported. The firm criticized that while many DeFi platforms claim to be decentralized, they actually have identifiable intermediaries, such as developers and governance groups, who earn transaction fees and influence order processing. Citadel also argued that transactions via smart contracts are binding contractual acts similar to orders on traditional exchanges. The letter stressed that exempting these trades from SEC regulation could create gaps in key investor protections, including fee disclosures, conflicts of interest, surveillance, compliance, and custody. While not opposing innovation itself, Citadel asserted that tokenized securities must be subject to the same regulations as traditional stocks. Meanwhile, some in the industry have pushed back, arguing that the position shows a misunderstanding of decentralization.