- Citadel Securities and other Wall Street firms have signaled opposition to regulatory relief for parts of the crypto industry.
- Industry figures expect legal challenges as firms push back on exemptions from securities rules.
- Wall Street shows a split: some firms oppose crypto, while others, like Fidelity, explore blockchain opportunities.
- Tensions are likely to surface during 2026 rulemaking at the SEC and CFTC.
In early December, Citadel Securities sent a formal letter to the SEC urging the agency to reconsider granting broad exemptive relief to crypto firms and warning that such action could “override key investor protections.” The letter also argued that much decentralized finance activity should fall under securities regulation; the document is available here: Citadel letter to the SEC.
Amanda Tuminelli of the DeFi Education Fund said legal challenges are likely and cited the Citadel letter as evidence. She told attendees at a recent policy event, “I do think we’re going back to court whether we want to or not,” and added the letter “makes it abundantly clear that Citadel is getting ready to sue.” The event recording is available here: policy event video.
Other TradFi institutions, including Nasdaq, have urged the SEC to drop plans for some crypto exemptions. Banking groups opposed parts of the GENIUS Act related to stablecoin rewards, but the bill passed Congress and the administration has not moved to change the language.
Industry sources say Wall Street is divided. Some firms view crypto as a threat, while others see blockchain as a way to lower costs and change existing processes. One policy leader said, “I think over the course of the next year, the perspectives of the Fidelitys of the world among TradFi players will start to be a little bit louder, and balance out those on the other side saying we’re an existential threat.”
The same leader expects the dispute to intensify during 2026 rulemaking at the SEC and CFTC. They noted, “It could be that it peters out in the sense that TradFi actually recognizes the opportunity here,” but warned it could also turn into “a full head-on clash.”
Definitions: Exemptive relief — a regulatory waiver allowing firms to avoid certain rules. DeFi — decentralized finance, meaning blockchain-based financial services without centralized intermediaries. Market maker — a firm that provides liquidity by quoting buy and sell prices.
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