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 exchange and broker-dealer compliance are a terrible idea.
It would be much better — for Main Street investors, of course, not just for Citadel’s profits — if the SEC would limit its exemptive relief to DeFi, follow its formal notice-and-comment rule-making processes, and apply the statutory definitions of “exchange” and “broker-dealer” to many DeFi exchanges.
According to Citadel’s characterization, exemptive relief to DeFi would create a two‑tier regulatory regime for the same 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 industry cast him as a villain who uses his quantitative trading giant to extract money from everyday investors.
Griffin famously outbid an ill-conceived decentralized autonomous organization in purchasing a rare copy of the US Constitution and earned immediate ire from disappointed crypto traders.
This week, Jake Chervinsky of the Blockchain Association 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 those thoughts. He claimed Citadel was simply cloaking an attempt to protect its payments for order flow from DeFi.
Read more: Crypto cases Trump’s SEC has paused and dismissed in 2025
Finally, 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 relief to crypto throughout 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.”
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Source: https://protos.com/ken-griffin-wants-the-sec-to-follow-citadels-advice-about-defi/
