Citadel Urges SEC to Regulate DeFi Developers, Sparking Strong Crypto Backlash

Source: DefiPlanet Original Title: Citadel Urges SEC to Regulate DeFi Developers, Sparking Strong Crypto Backlash Original Link:

Quick Breakdown

  • Citadel calls for tighter SEC regulation of decentralized finance developers.
  • Crypto community rejects the move, citing threats to innovation and decentralization.
  • Debate highlights ongoing tensions between traditional finance and Web3 autonomy.

Citadel calls for SEC intervention into oversight of DeFi developers

Citadel has urged the U.S. Securities and Exchange Commission (SEC) to increase regulatory scrutiny of decentralized finance (DeFi) developers, arguing for greater investor protection and compliance with securities laws. This recommendation has sparked a swift and vocal backlash within the crypto community, which views such regulation as a threat to DeFi’s foundational principles of decentralization and open innovation.

Industry experts warn that imposing traditional regulatory frameworks on DeFi developers could slow innovation and push builders away from creating open, permissionless financial tools. Many argue that DeFi’s built-in transparency, through open-source code, on-chain auditability, and public transaction histories, already provides strong safeguards without heavy-handed oversight.

This tension highlights a bigger debate that’s been simmering for years: how do you protect users while still giving the blockchain industry enough room to experiment and evolve?

Crypto developers and advocates also warn that increased regulation might shift control back to centralized entities, undermining the decentralized ethos and potentially consolidating power among entrenched financial institutions. They call for nuanced policy approaches tailored to the unique characteristics of blockchain technology rather than retrofitting legacy financial-sector rules.

The SEC has yet to issue formal guidance specifically targeting DeFi developer activity. Still, public and industry discourse on digital asset regulation continues to evolve rapidly amid rising mainstream adoption and institutional interest.

Meanwhile, a major cryptocurrency exchange reported securing $800 million in funding through two rounds. This significant investment pushes the company’s overall valuation to $20 billion and includes a critical strategic commitment from certain institutional investors. The new capital is specifically earmarked to fuel aggressive plans for global expansion across regions like Latin America and Asia-Pacific, while simultaneously developing more regulated products.

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0xSunnyDayvip
· 20h ago
Citadel is up to something again, another move... Wanting the SEC to regulate DeFi developers? Isn’t this just disguised centralization? Hilarious.
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ChainProspectorvip
· 12-05 19:18
What is Citadel trying to do? Traditional finance wants to control decentralized things too? What a joke, isn’t this just monopolists being afraid of being disrupted?
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LiquidityNinjavip
· 12-04 17:53
Citadel is causing trouble again? Now they want the SEC to regulate developers… Are they really just treating crypto like centralized finance?
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DAOdreamervip
· 12-04 17:46
Is Citadel trying to kill DeFi... This is really ridiculous. Does traditional finance really have to crush crypto to feel satisfied?
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PseudoIntellectualvip
· 12-04 17:43
Is Citadel trying to stir things up again? Traditional finance just can't change its ways. Afraid DeFi will steal their business, so they just go straight to filing complaints. What a joke.
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BtcDailyResearchervip
· 12-04 17:28
Citadel is trying to stranglehold here—on one hand, it's capitalism, on the other, regulation. Web3 is supposed to be about decentralization, but now they're adding more regulation. Isn't that the opposite logic?
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