The Blockchain Association opposes Citadel's regulatory claims on DeFi and supports the SEC's innovation exemption framework

The Blockchain Association submitted a letter to the U.S. Securities and Exchange Commission (SEC) in response to Citadel's previous call for increased regulation of DeFi.

The Blockchain Association stated that DeFi protocol developers do not fall under the category of brokers or exchange operators and should not be included in the regulatory framework designed for traditional financial intermediaries. The organization also urged the SEC to advance an "innovation exemption" mechanism to provide regulatory pilot space for on-chain assets and tokenized securities, pointing out that the comprehensive rule-making process is lengthy, which may delay the implementation of technology and lead to innovation outflow. Previously, Citadel had suggested that the SEC strengthen regulation of DeFi through formal legislative processes.