The SEC meeting reveals regulatory differences on tokenization, with opposing views between traditional finance and the crypto industry

According to The Block, 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 regulatory issues surrounding 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 suggested that the SEC implement stricter rules for tokenized securities, requiring full identification of intermediaries involved in transactions, including decentralized trading protocols. This proposal immediately sparked strong opposition from the crypto industry. Coinbase's Vice President of Regulatory Policy, Scott Bauguess, stated at the meeting that the same regulatory obligations cannot be imposed on decentralized exchanges (DEXs) as on brokers, as this would introduce risks that do not exist in the current environment. SEC Chairman Paul Atkins emphasized the need to provide a compliance pathway for market participants to leverage the unique capabilities of new technologies to drive innovation, investment, and jobs in the U.S. Meanwhile, outgoing Democratic Commissioner Caroline Crenshaw expressed concerns about the risks that tokenized products, such as "wrapped securities," may pose to investors.