## The DeFi Industry Challenges Citadel: A Battle for Regulation Under the New Administration

Last Friday, a united front of key players in the decentralized finance industry responded decisively to Citadel Securities' proposal before the U.S. Securities and Exchange Commission (SEC). Patrick Vitter's move, a White House crypto advisor, to support the protection of software developers and DeFi protocols marks a significant shift in regulatory direction under the Trump administration.

Citadel Securities had submitted a 13-page letter suggesting increased regulation of DeFi protocols that manage tokenized securities, arguing they should operate under the same registration frameworks as traditional exchanges and brokers. However, the coalition composed of DeFi Education Fund, Andreessen Horowitz (a16z), Digital Chamber, Orca Creative, lawyer J.W. Verret, and the Uniswap Foundation called these arguments "completely unfounded."

### Fundamental Disagreements Over the Regulatory Model

The joint letter from the DeFi alliance directly rejects Citadel's core premise: that achieving investor protection and market integrity "always requires traditional intermediaries registered with the SEC." The signatories argue that it is entirely feasible to achieve these goals through carefully designed on-chain markets, without the need for inherited regulatory structures.

Jennifer Rosenthal, spokesperson for DeFi Education Fund, was particularly critical of Citadel's position, noting that the entity primarily defends its own commercial interests against a technology that poses a direct threat to its business model and market share. The alliance emphasized that Citadel's letter contains "numerous factual inaccuracies and misleading statements."

### Government Support for Innovation

On the official side, Citadel Securities issued a statement reaffirming its support for tokenization and digital financial innovation as tools to strengthen American leadership. However, the company insisted that these advances must be implemented while maintaining rigorous protections for investors, considered the gold standard in global securities markets.

Patrick Vitter's move to publicly support DeFi via the social platform X underscores the changing political climate. His office explicitly expressed support for "the need to protect software developers and DeFi," highlighting a fundamental misalignment with the more restrictive regulatory proposal presented by Citadel Securities.

This confrontation reflects a deeper tension: whether decentralized innovation should be subjected to regulatory frameworks designed for centralized intermediaries, or if, on the contrary, regulation should adapt to new market architectures that operate on fundamentally different principles.