Ken Griffin’s Citadel Urges SEC to Treat Tokenized Shares Like Traditional Stocks
Main Idea
Citadel Securities urges the SEC to apply the same regulatory standards to tokenized equities as traditional securities, warning against regulatory arbitrage and market fragmentation.
Key Points
1. Citadel Securities submitted a letter to the SEC’s Crypto Task Force advocating for equal treatment of tokenized equities and traditional securities.
2. The firm argues that 'look-a-like' tokenized products should not receive more flexible regulatory treatment as they meet the definition of securities.
3. Citadel warns that allowing different standards for tokenized equities could create shadow markets, fragment liquidity, and introduce risks like counterparty issues and confusion over voting rights.
4. The letter calls for the SEC to collaborate with the CFTC and foreign regulators to prevent cross-border regulatory loopholes.
5. Citadel emphasizes the need to uphold existing regulatory frameworks to avoid unfair advantages for a subset of market participants.
Description
Citadel Securities, the trading giant founded by billionaire Ken Griffin, is calling on the US SEC to hold tokenized equities to the same standards as traditional listed stocks. In a recent letter submitted to the SEC’s Crypto Task Force on July 21, the firm warned against granting broad exemptions for digital assets that resemble equity securities. The company said it supports innovation in market infrastructure, but drew a sharp line between true technological progress and regulatory arbitrage...
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