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Wall Street giants push back on exemptions for tokenized securities in SEC meeting
Executives and industry groups pressed regulators to apply traditional securities rules to blockchain-based trading, pushing back on exemptions even as DeFi enters the debate.
Jan 28, 2026, 5:55 p.m.
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What to know:
- Representatives from SIFMA, Cahill Gordon & Reindel, Citadel and JPMorgan met with the SEC’s Crypto Task Force to argue that tokenized securities should be regulated under existing federal securities laws rather than a separate regime.
- The firms warned that allowing tokenized assets to trade under looser standards could undermine investor protections and market-structure rules, and urged the SEC to rely on formal rulemaking instead of informal staff guidance.
- While DeFi was only briefly discussed in the meeting, the session and a related SEC speech on 24/7 trading highlighted growing alignment between regulators and major financial institutions that tokenization changes market plumbing but not the economic reality of securities.
Five Wall Street firms met with the Securities and Exchange Commission’s Crypto Task Force Tuesday to discuss regulatory approaches to digital assets and decentralized finance (DeFi) and how tokenized securities should be treated under existing federal laws.
According to the SEC memo, published Tuesday, representatives from the Securities Industry and Financial Markets Association (SIFMA), Cahill Gordon & Reindel LLP, Citadel LLC and JPMorgan Chase & Co. requested the meeting to follow up on recent letters to the commission and its Crypto Task Force.
STORY CONTINUES BELOW
During the meeting, the participants argued that securities should not be allowed to trade under different rules simply because they are issued or transacted on blockchain rails, warning that regulatory shortcuts could allow tokenized equities or other securities to bypass longstanding investor-protection and market-structure requirements. They also urged the SEC to rely on formal rulemaking, rather than, for example, than broad exemptive relief.
The Wall Street firms said they agreed that innovation in digital markets should advance within the guardrails of investor protection and market integrity. They argued against broad, immediate exemptive relief for tokenized trading activities, saying that tokenization changes market plumbing, not the underlying economic reality of securities. Tokenized instruments, whether issued natively or through entitlement or “wrapped” structures, were framed as economic equivalents of traditional securities.
The meeting took place nearly a month after Citadel released a 13-page letter advising the SEC that DeFi protocols handling tokenized securities demand a closer regulatory grip. The crypto industry immediately responded with its own correspondence, calling the arguments "baseless."
Citadel’s letter came amid broader debate over how the SEC should regulate DeFi and tokenized securities, drawing swift criticism from parts of the crypto industry.
DeFi was not a central topic during the meeting and was referenced only insofar as it raises regulatory questions for trading tokenized securities, particularly around how exchange, broker-dealer and market-access rules might apply to decentralized or hybrid models. Broader DeFi activity, such as lending or governance, was not discussed.
Speaking Wednesday at a SIFMA roundtable on 24/7 trading, SEC Trading and Markets Director Jamie Selway said that “some non-equity markets, such as those for digital assets, currently operate 24-by-7,” adding that a “growing consensus of market participants wants the equity markets to follow this course.”
Selway said expanded trading hours could strengthen U.S. market competitiveness if implemented with shared infrastructure, common protocols and careful attention to operational risks such as corporate actions.
Overall, the meeting at the SEC reflected increasing convergence between regulators and major financial institutions around a shared premise: tokenization may modernize markets, but it does not require a separate regulatory regime.
