BroadChain has learned that on April 7, the Blockchain Association submitted a comment letter to the U.S. Securities and Exchange Commission (SEC) in response to a prior proposal from Citadel Securities advocating for stricter DeFi regulation.
The Blockchain Association argued that DeFi protocol developers are neither brokers nor exchange operators and should not be subject to regulatory frameworks designed for traditional financial intermediaries.
The organization also called on the SEC to advance an "Innovation Exemption" mechanism, which would create a regulatory sandbox for on-chain assets and tokenized securities. It noted that comprehensive rulemaking is a lengthy process that could delay technological adoption and push innovation overseas.
This follows Citadel Securities' earlier recommendation that the SEC strengthen DeFi oversight through formal rulemaking.