Wall Street Demands Existing Rules in Jan. 27 Meeting
On January 27, 2026, top Wall Street institutions including JPMorgan Chase & Co., Citadel LLC, and the Securities Industry and Financial Markets Association (SIFMA) met with the SEC's Crypto Task Force. Their core message was that tokenized securities must be governed by the same federal laws that apply to traditional stocks and bonds, without special exemptions. The firms argued that while blockchain technology changes the market's 'plumbing,' it does not alter the fundamental economic reality of a security.
According to a memo of the meeting, the group warned that creating a separate, more lenient regulatory path for tokenized assets could undermine decades of established investor protections and market-structure rules. They pushed for the SEC to use formal rulemaking processes to establish clarity, opposing the use of informal staff guidance or broad exemptive relief which could create an uneven playing field.
Citadel's Earlier Letter Set Stage for Regulatory Battle
The meeting intensified an ongoing debate between traditional finance and the crypto industry. It took place nearly a month after Citadel submitted a 13-page letter to the SEC in December 2025, advising a 'closer regulatory grip' on decentralized finance (DeFi) protocols that handle tokenized securities. In response, crypto industry advocates from the DeFi Education Fund sent their own correspondence, labeling Citadel's arguments as 'baseless.'
While DeFi was a catalyst for the broader discussion, it was not the central topic of the January 27 meeting. Participants only referenced it to question how existing exchange, broker-dealer, and market-access rules would apply to decentralized trading models. The primary focus remained on ensuring that any asset defined as a security, regardless of its underlying technology, is regulated as such.
Regulators and Institutions Align on Market Modernization
Despite the push for traditional rules, there is a growing consensus on adopting the technological benefits of digital markets. Speaking at a SIFMA roundtable on January 28, SEC Trading and Markets Director Jamie Selway noted that 'a growing consensus of market participants wants the equity markets to follow' the 24/7 trading model already common for digital assets. He added that such a move could boost U.S. market competitiveness if implemented correctly.
The meeting and Selway's comments signal an increasing convergence between regulators and major financial institutions. Both sides appear to agree that tokenization can modernize markets, but Wall Street is firm that this evolution must occur within the existing regulatory framework. The outcome will determine whether digital assets are integrated into the current system or foster a new, parallel one.
