SEC Meeting Reveals Tokenization Regulatory Divide: Traditional Finance vs. Crypto Industry Perspectives

According to TechFlow, on December 5, The Block reported that the U.S. Securities and Exchange Commission (SEC) Investor Advisory Committee held a meeting on Thursday, where executives from companies such as Citadel Securities, Coinbase, and Galaxy discussed the regulation of asset tokenization. The meeting revealed a clear divide between traditional finance and the crypto industry regarding decentralization issues.

In a letter submitted on Wednesday, Citadel Securities suggested that the SEC implement stricter rules on tokenized securities, requiring full identification of intermediaries involved in transactions, including decentralized trading protocols. This proposal immediately drew strong opposition from the crypto industry. Scott Bauguess, Vice President of Regulatory Policy at Coinbase, stated at the meeting that decentralized exchanges (DEX) should not be subject to the same regulatory obligations as brokers, as this would introduce risks that do not exist in the current environment.

SEC Chairman Paul Atkins emphasized that, to promote U.S. innovation, investment, and employment, there must be a compliant path for market participants to leverage the unique capabilities of new technologies. Meanwhile, outgoing Democratic Commissioner Caroline Crenshaw expressed concerns about the potential risks to investors posed by tokenized products such as “wrapped securities.”