JPMorgan and Wall Street meet with SEC crypto task force on DeFi.

JPMorgan Chase, Citadel, and SIFMA met with the SEC's Cryptocurrency Working Group to protest the trend of deregulation, warning that anticipated exemptions for Tokenize securities and certain DeFi projects could undermine investor protections and cause market turmoil.

The exchange took place amid reports that the SEC is preparing a plan to exempt certain cryptocurrency-related activities. Wall Street representatives are concerned that this approach could create legal loopholes and have widespread repercussions for the U.S. economy.

Meeting with the SEC: Parties and Key Issues

Representatives from JPMorgan Chase, Citadel, and the securities industry association SIFMA met with the SEC's Cryptocurrency Working Group on Tuesday to raise concerns about its perceived "loose" stance on digital assets.

The discussion focused on the SEC's upcoming plan to grant exemptions for Tokenize securities. Attendees argued that if the exemptions were too broad, the impact could extend beyond the cryptocurrency market and extend to traditional financial channels.

The parties also expressed concerns about the possibility that the SEC intends to exclude certain DeFi projects from compliance obligations under securities laws. This could create discriminatory treatment between similar issuance/trading models that are labeled with different technologies.

SIFMA's arguments and warnings about market risks.

SIFMA emphasizes that regulation should be based on economic characteristics rather than technology or designation, and opposes broad exemptions for Tokenize trading activities.

According to SIFMA's meeting documents, the application of broad exemptions could weaken investor protections and cause market turmoil. SIFMA cited the potential risk of a flash crash in the cryptocurrency market in October 2025 as a cautionary example.