Citadel Securities, a major American investment firm, has called for decentralized finance (DeFi) players to be regulated similarly to traditional financial institutions. This demand sparked strong resistance from the DeFi community. The dispute originated from letters submitted to the U.S. Securities and Exchange Commission (SEC), in which Citadel emphasized the need for stringent monitoring of DeFi platforms’ financial activities. DeFi, or decentralized finance, operates through blockchain technology, providing financial services such as lending, transactions, and investments without central intermediaries. While firms like Citadel operate under established regulations and oversight, the decentralized nature of DeFi raises questions about regulatory control. Citadel’s concerns stem from the potential risks posed by unchecked DeFi growth, including fraud, money laundering, and market instability. Conversely, the DeFi community argues that the core strength of these platforms lies in their independence and autonomy, which traditional regulatory frameworks could undermine. This verbal confrontation highlights ongoing efforts to reconcile conventional financial institutions with emerging blockchain-based services. Experts warn that unresolved tensions may hinder DeFi’s development in the U.S. financial market, while overly strict regulation could compromise its foundational model. Moving forward, the U.S. government and regulatory agencies are expected to seek a balanced approach that ensures financial system transparency and protects consumer rights.
Source: coindesk
