Citadel Cautions SEC on Tokenized Securities Push

Citadel Securities has called for measured regulatory action as the SEC considers frameworks for tokenized securities. The market Maker warned that accelerated adoption without proper safeguards could fragment liquidity and disadvantage institutional participants.

The firm's formal submission emphasizes the need for structured rulemaking over ad hoc guidance, reflecting broader industry tensions between innovation and market stability. Tokenization advocates tout benefits like fractional ownership and 24/7 trading, while traditional players highlight risks to existing market infrastructure.

SEC Chairman Paul Atkins' openness to blockchain-based financial products now faces counterpressure from established capital markets participants. The debate underscores growing pains as distributed ledger technology intersects with legacy systems.