- Citadel Securities proposes DeFi regulation, prompting industry backlash over claims.
- Industry calls Citadel’s claims unsupported by legal precedent.
- Potential threat to U.S. competitiveness and innovation, warns Blockchain Association.
On December 13, Citadel Securities urged the SEC to enforce regulations on DeFi protocols managing tokenized securities, prompting industry backlash led by the Blockchain Association and DeFi Education Fund.
The dispute highlights tension over how decentralized finance should be regulated, with potential implications for innovation and U.S. competitiveness in the blockchain sector.
Citadel’s Regulatory Proposal and Industry Backlash
Citadel Securities submitted a 13-page proposal to the SEC, arguing for stricter regulation of DeFi protocols handling tokenized securities. Demanding registration of DeFi platforms akin to financial intermediaries, Citadel’s submission prompted immediate reactions. Their argument cited regulatory necessity, although the blockchain industry strongly refuted it.
The collective industry response, spearheaded by the Blockchain Association, labeled Citadel’s assertions legally baseless. Experts argue that such regulation could hinder U.S. competitiveness and push innovations abroad. Decades of legal precedent were cited in defense of developers.
Legal Precedents and Market Implications
Did you know? In the past, legal actions attempting to regulate open-source software developers as financial intermediaries have been successfully challenged, underscoring the industry’s robust defense of software freedom and innovation.
According to CoinMarketCap, Bitcoin currently trades at $90,270.97, with a market cap of $1.80 trillion. It holds a 58.73% market dominance, despite recent declines: 24-hour change of -2.31% and 90-day dip of -22.13%. Trading volume increased, affecting short-term trends.
Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 02:35 UTC on December 13, 2025. Source: CoinMarketCapCoincu research indicates that the proposal could signal a regulatory shift affecting DeFi platforms globally. However, the legal and technological communities maintain that extensive regulation could stall future blockchain innovation, potentially driving development efforts to more permissive regions.
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Source: https://coincu.com/news/citadel-defi-regulation-dispute/
