DeFi Under Fire: Uniswap Creator Hits Back at Citadel’s SEC Appeal

• Uniswap founder Hayden Adams has publicly criticized Citadel Securities for advocating that DEFI, like traditional brokerages, be audited by the SEC.
• Citadel’s letter to Sec warns of shadow markets from tokenized stocks on DeFi platforms, pushing the boundaries of technology-neutral rules.

In a new clash between crypto innovators and traditional financial giants, Uniswap founder Hayden Adams sharply criticized Citadel Securities. An influential marketer recently called on the U.S. Securities and Exchange Commission (SEC) to apply Wall Street-style rules to decentralized finance (DeFi) protocols. The move, detailed in a letter to the SEC, has sparked debate about how regulators should handle blockchain-based trading systems.

Adams did not hold back in his response to X, who previously worked on Twitter. He attributed Citadel’s actions to past disagreements, stating, “First Ken Griffin screwed over Constitution DAO. Now he’s coming for DeFi, asking the SEC to treat software developers of decentralized protocols like centralized intermediaries.” He further suggested, “Bet Citadel has been lobbying behind closed doors on this for years.” Constitution DAO refers to a 2021 cryptocurrency company that tried to buy a rare copy of the U.S. Constitution, but lost due to an auction scandal involving Citadel CEO Ken Griffin.

Citadel’s position is that DeFi is no different from traditional markets. In their statement to the SEC, they claim that many DeFi structures coordinate transactions in such a way that they reflect the activities of regulated exchanges or brokers. They warn that allowing free trade in tokenized stocks — digital versions of stocks — on DeFi could lead to the creation of unregulated “shadow markets.” This can lead to reduced liquidity, evasion of reporting requirements, and violation of investor guarantees built into U.S. stock regulations.

The company lists DeFi elements such as trading interfaces, smart contract developers, validators, and liquidity providers as potential intermediaries if they take commissions or forward orders. Citadel emphasizes a “technology neutral” approach: the same actions, the same rules, whether using old-school systems or smart contracts. In July, they shared this point of view with the SEC’s task force on cryptography, pushing for innovations that fit into the existing framework without loopholes.

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Adams countered by pointing out what he viewed as hypocrisy in Citadel’s “fair access” argument. Adams mocked, saying, “The actual nerve for one of their arguments to be that there is no way for DeFi protocols to provide ‘fair access’ of all things lmao.” He explained that DeFi’s open-source and peer-to-peer design actually democratizes liquidity, unlike “shady TradFi market makers.” This structure allows anyone to participate in the system without any “gatekeepers,” potentially lowering costs and increasing transparency.

His comments show that many people in the DeFi space are unhappy with U.S. regulators. Earlier this year, the SEC stepped up its enforcement by sending notices to companies like Uniswap Labs for activities that weren’t registered. Adams and others, on the other hand, say that DeFi’s decentralized nature—operating on public blockchains without a central authority—doesn’t fit with old rules that were made for centralized entities.