The US SEC holds discussions on tokenization regulation, with significant differences between traditional finance and the crypto industry on the issue of decentralization.

[The US SEC Discusses Tokenization Regulation Issues; Clear Divide Between Traditional Finance and Crypto Industry on Decentralization]

The US Securities and Exchange Commission ((SEC)) Investor Advisory Committee held a meeting on Thursday where executives from companies such as Citadel Securities, CEX, and Galaxy discussed the regulation of asset tokenization. The meeting revealed a clear divide between traditional finance and the crypto industry on the issue of decentralization.

In a letter submitted on Wednesday, Citadel Securities recommended that the SEC implement stricter rules for 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 CEX, stated at the meeting that decentralized exchanges ((DEX)) should not be subject to the same regulatory obligations as brokers, as this would introduce risks not present in the current environment.

SEC Chairman Paul Atkins emphasized that in order to promote US innovation, investment, and employment, it is essential to provide a compliance path that allows market participants to leverage the unique capabilities of new technologies. However, outgoing Democratic Commissioner Caroline Crenshaw expressed concerns about the risks tokenized products like “wrapped securities” could pose to investors.