Employees of major market maker Citadel Securities are being criticized for proposing to regulate the trading of tokenized shares.
The firm’s employees sent a letter to the US Securities and Exchange Commission (SEC), in which they advised officials to establish controls over decentralized services that trade digital assets based on securities of various companies, such as Tesla tokenized stock (TSLAX) and NVIDIA tokenized stock (NVDAX).
According to Citadel Securities, trading in tokenized securities should be regulated in the same way as regular shares, because they are essentially the same assets.
Leading tokenized stocks by market capitalization
The company’s initiative has drawn the ire of crypto industry executives. Blockchain Association board member Jake Chervinsky rightly believes that the market maker is acting in the interests of traditional financial institutions and is attempting to hinder the implementation of an innovation that eliminates the brokerage intermediary.
Founder of the exchange Uniswap Hayden Adams believes the firm has turned against tokenized shares because it fears the transparency they provide.
Regulating software developers [creators of tokenized shares] as if they were financial intermediaries would undermine U.S. competitiveness, drive innovation overseas, and do nothing to protect investors.
We urge the SEC to reject this overly broad and impractical proposal and instead focus on regulating the real intermediaries standing between users and their assets, said Summer Mersinger, director of the Blockchain Association.