Unsiwap's founder accuses Citadel of pushing SEC toward harsh DeFi regulation

Hayden Adams, the founder of Uniswap, has alleged that Citadel founder Ken Griffin is influencing U.S. regulators in a manner that could redefine how decentralized finance (DeFi) developers are treated under federal securities laws.

Adams argues that Griffin is urging the SEC to classify software engineers behind decentralized protocols as if they were operating traditional, centralized financial intermediaries.

Adams flags Citadel’s push against DeFi

According to Adams, Citadel has, in his view, been pressing for tougher treatment of DeFi projects for years. He referenced past disputes, including his claim that Griffin previously opposed the efforts of ConstitutionDAO, a community-driven initiative that attempted to bid on a historical U.S. document.

Adams also reported that Citadel’s claims that DeFi protocols cannot ensure fair access are a key point in the company’s regulatory stance. He drew attention to Citadel’s market-making role in traditional finance as context for why such claims have drawn criticism within the crypto community.

The post by Adams also sparked further discussions among industry players. Developer Armani Ferrante noted that the debate has exacerbated difficulties in identifying DeFi, noting that market actors are spread across a continuum of platforms, including centralized exchanges, decentralized exchanges, unregulated entities, and services whose design appears decentralized but in fact has an unknown control structure.

Ferrante suggested that other projects continue to be based on a “trust me” model of operations, which raises concerns about access, security, and classification. He also cited what he termed the HFT test, which was whether an end user would feel safe when a high-frequency trader in any jurisdiction was a participant in a protocol.

BlockTempo responded by highlighting that the appeal of DeFi lies in its accessibility to users in jurisdictions not popular with the United States. BlockTempo also asserted that Uniswap enforces stringent in-house criteria, which is contrary to other platforms that support free market access.

Regulatory context surrounding SEC actions against DeFi projects

The controversy is further escalated by the fact that the SEC continues to increase its enforcement in the decentralized finance industry. In September 2024, the agency resolved charges against Rari Capital, Inc. after concluding that the company and its co-founders had misrepresented to investors that its Earn pools were automated when, in fact, they were not, and that they had engaged in unregistered brokerage through its Fuse pools.

Regulators discovered that the company was manually rebalancing user assets, despite having allegedly independent processes in place. The platform had over $1 billion in locked assets at its peak. The SEC further added that Rari Capital misplaced unregistered securities by distributing Rari governance tokens.

The settlement occurred after an exploit incident at the firm in 2022, when the Fuse lending platform was breached and up to $ 80 million was stolen before the platform was shut down. Under the deal, Rari Capital Infrastructure LLC agreed to stop future breaches of securities laws.

According to the agency, merely labeling a product as decentralized or autonomous does not alter its responsibilities under federal law.

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