The cold war between decentralized finance (DeFi) and Wall Street incumbents turned hot Tuesday, with Uniswap Labs founder Hayden Adams accusing Citadel Securities of engineering a regulatory kill-switch for the industry. Adams alleges the market-making giant is pressuring the Securities and Exchange Commission (SEC) to legally reclassify software developers as “centralized intermediaries,” a designation that would impose impossible compliance burdens on permissionless protocols.
The cold war between decentralized finance (DeFi) and Wall Street incumbents turned hot Tuesday, with Uniswap Labs founder Hayden Adams accusing Citadel Securities of engineering a regulatory kill-switch for the industry. Adams alleges the market-making giant is pressuring the Securities and Exchange Commission (SEC) to legally reclassify software developers as “centralized intermediaries,” a designation that would impose impossible compliance burdens on permissionless protocols.
Adams’ remarks, published on social media, claim that Citadel is pushing the Securities and Exchange Commission (SEC) to classify software creators of decentralized protocols as if they operated traditional institutions, a shift he argues would reshape how DeFi teams are treated under federal rules.
Adams referenced what he described as Citadel’s long-running efforts to shape policy, asserting that the firm has been lobbying behind closed doors for years. He also linked the current dispute to his view of previous tensions involving ConstitutionDAO, suggesting Griffin had opposed the project in the past.
Following Adams’ post, developers and community figures weighed in on what they described as broader structural issues complicating today’s policy discussion. Developer Armani Ferrante said the debate is often undermined by the absence of a clear definition of DeFi, noting that platforms range from fully decentralized exchanges to centralized entities that present themselves as decentralized.
He argued that some systems enable unequal market access and rely on trust rather than verifiable mechanisms, suggesting that policymakers and users should evaluate whether a protocol withstands extreme scenarios involving high-frequency trading actors.
BlockTempo added that Uniswap’s internal standards differ from many other projects. The outlet that DeFi remains active because users in jurisdictions not favored by the United States can still interact with decentralized platforms.
The exchange unfolded as the SEC continues to enforce securities laws against DeFi teams. In September 2024, the regulator charges with Rari Capital and its co-founders, alleging they misled investors and operated as unregistered brokers.
The SEC stated that it evaluates economic realities over decentralization labels and will hold individuals accountable when violations occur.
