Undercurrents at the SEC Meeting: Citadel Proposes Strict Regulation of DeFi Tokenization—Why Is the Crypto Community in Uproar?

[BlockBeats] Last Thursday’s SEC Investor Advisory Committee meeting had a rather subtle atmosphere. Executives from big players like Citadel Securities, Coinbase, and Galaxy sat together to discuss tokenization—in simple terms, bringing real-world assets onto the blockchain.

Samara Cohen, Global Head of Market Development at BlackRock, played it diplomatically, saying it’s a good thing that people have different views—after all, “development paths differ,” and maybe there’s no standard answer to these questions. It all sounded cordial, but everyone was aware of the underlying tensions.

The story traces back to the day before the meeting. On Wednesday, Citadel Securities sent a letter to the SEC, suggesting stricter rules for DeFi involving tokenized securities. That was like kicking a hornet’s nest: the crypto community erupted, with many online calling for a boycott of the market maker. When a traditional finance giant tries to shackle decentralization, it’s no wonder people get upset.

However, the attitude of new SEC Chairman Paul Atkins is worth noting. In his prepared remarks, he said that if the US wants to move forward in innovation, investment, and employment, it must “provide compliant pathways” for market participants to use these new technologies. It sounded like an attempt to strike a balance—enforcing the rules, but also leaving some room for growth.

At the end of the day, this debate is a clash between two logics: can the traditional regulatory framework accommodate the ambitions of decentralization? Should tokenized securities be governed by old rules, or do they need entirely new ones? It looks like the argument will continue for a while.