Citadel Warns SEC on Tokenized Equity Carveouts
The influential market-maker urged caution as tokenized stocks gain momentum.
Citadel Securities has urged the SEC to treat tokenized equities the same as traditional securities—cautioning that blockchain-enabled trading without robust regulation could harm liquidity, fairness, and transparency in U.S. markets.
What’s the Scoop?
- Formal Letter to SEC: Citadel submitted a letter warning that a rushed rollout of tokenized equities might drain liquidity from traditional markets and give crypto platforms unfair advantages.
- Round-the-Clock Trading Risks: The firm claims 24/7, fractional tokenized trading could confuse investors and destabilize the current equity infrastructure.
- Call for Rulemaking: Citadel is demanding a formal notice-and-comment process, not piecemeal exemptions or informal SEC staff guidance.
- Transparency Concerns: The letter flags fragmentation risks, opaque off-exchange trading, and lack of consolidated reporting for tokenized versions of NMS securities.
- Broader Pushback: Citadel’s position aligns with industry groups like SIFMA and SEC Commissioner Hester Peirce, who have emphasized the need for clear public oversight.
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