Blockchain Association Challenges Citadel's Innovation Exemption to SEC

On April 7, Monday, the cryptocurrency advocacy group responded to the U.S. Securities and Exchange Commission (SEC) regarding a letter from Citadel in December, which called for stricter regulation of DeFi. In December, Citadel stated that many DeFi protocols connect buyers and sellers through non-discretionary methods such as algorithms, fitting the definition of exchanges. The company urged the SEC to adopt a more formal approach to rulemaking through announcements and comments, rather than granting exemptions as currently considered by regulators. However, the Blockchain Association refuted this stance, arguing that DeFi protocol developers are neither brokers nor dealers and do not operate exchanges, and therefore “cannot be forced into statutory categories designed for intermediaries that operate manually.”

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