Major Concerns Raised by JPMorgan and Citadel About the SEC's Approach to Digital Assets

The increasingly heated crypto regulation issues are accompanied by loud voices from global financial players. Three leading institutions—JPMorgan, Citadel, and SIFMA—have officially expressed their concerns to the SEC’s special task force regarding policies they perceive as too permissive toward security tokens and decentralized finance (DeFi) projects. The messages conveyed in these meetings carry significant weight, given the dominant positions of these three institutions in the global financial ecosystem.

Protests from the Traditional Financial Industry Against SEC Regulations

According to a report from NS3.AI, the main concern raised is about the scope of exemptions from securities laws, which are considered too broad. The speakers emphasized that lax policies could create dangerous conditions for market stability and weaken investor protection mechanisms. The background of these protests is quite clear—recent collapses totaling $19 billion in the crypto industry have demonstrated how a lack of oversight can have catastrophic impacts.

This concern is not merely a formal complaint but reflects a deep gap between traditional industry perspectives and a more open regulatory approach toward blockchain innovation. These establishment institutions worry that DeFi business models and complex tokenomics could evade existing legal frameworks.

Stablecoins and the Negotiation Battle on the Senate Floor

Negotiations over the crypto market regulation structure at the Senate level are currently at a standstill, and fundamental disagreements are the cause. The most controversial issues include determining the exemption status for fully decentralized DeFi protocols and providing special incentives for banks within the stablecoin environment. The two sides have very different visions of how this sector should be regulated, creating a deadlock that is difficult to resolve.

The role of stablecoins in the digital financial landscape has become a point of contention, given their potential as payment instruments and stores of value that could compete with traditional banking systems. With banking incentives becoming part of the negotiations, the dynamics between innovation and stability are becoming more complex.

The Way Forward: Balancing Innovation and Protection

This meeting involving JPMorgan, Citadel, and SIFMA indicates that the crypto regulation debate has entered a critical phase. Major financial institutions do not want to see the SEC’s overly lenient approach to digital assets develop without strict oversight. On the other hand, the blockchain community continues to advocate for greater experimental freedom.

The decisions made in the coming months will determine the future direction of the crypto industry. Will security tokens and DeFi be tightly regulated like traditional financial products, or will they be given more room to grow? The answer to this question will depend on how effectively both sides’ arguments are presented in the ongoing legislative process.