Citadel Securities Turns Against DeFi While Pouring $500 Million into Ripple
Citadel Securities has taken a twin stance in crypto, publicly opposing regulatory exemptions for decentralized finance (DeFi) whereas co-leading a $500 million funding in Ripple.
The transfer highlights a rising divide between institutional help for compliant blockchain infrastructure and skepticism towards absolutely decentralized protocols.
Citadel’s Push Against DeFi Loopholes
Citadel Securities submitted a proper letter to the SEC on December 2, 2025. In the letter, the capital markets agency opposes carve-outs for DeFi platforms buying and selling tokenized US equities.
The agency argued that decentralized platforms should adhere to present investor protections. The letter raises issues about transparency, anti-money laundering (AML) and know-your-customer (KYC) compliance, market controls, and custody requirements.
“Exempting DeFi from oversight may endanger buyers and the broader market,” the letter warned, urging constant regulation throughout all buying and selling venues, centralized or blockchain-based.
The stance drew criticism from crypto advocates. The Blockchain Association warned that making use of conventional guidelines to open-source protocols may stifle innovation.
This debate mirrors historic SEC conflicts, reminiscent of these between former Chairman Gary Gensler, who favored strict enforcement, and Commissioner Hester Peirce, who usually dissented, advocating for regulatory flexibility.
Despite its public opposition to DeFi exemptions, Citadel co-led a $500 million funding round for Ripple.
The funding values Ripple at $40 billion, signaling confidence in its regulated, compliance-focused infrastructure. Other contributors included Pantera Capital, Galaxy Digital, Brevan Howard, and Marshall Wace.
Ripple has expanded aggressively within the institutional market. It acquired six corporations in two years, together with Hidden Road (rebranded as Ripple Prime) for $1.25 billion. Hidden Road now serves 300 establishments and processes $3 trillion in annual transactions.
Additional acquisitions, like GTreasury ($1 billion) and Rail ($200 million), strengthened Ripple’s custody, settlement, and treasury providers.
The agency’s RLUSD stablecoin has surpassed $1 billion in market cap, and a current 25% share buyback displays its monetary self-discipline.
Ripple now holds 75 global licenses and has processed $95 billion in funds, positioning itself as a bridge between conventional finance and blockchain.
Market Reaction and Implications
Despite the institutional backing, XRP fell virtually 10% to $2.17 following the funding announcement, reflecting investor uncertainty about its rapid utility.
The distinction between Citadel’s public regulatory advocacy and personal market bets highlights a broader pattern. Institutions favor blockchain tasks that function inside regulated frameworks reasonably than absolutely permissionless techniques.
As laws enhance, capital is more and more flowing towards compliant blockchain options, reinforcing investor protections whereas sustaining innovation.
Citadel’s strikes sign that regulatory readability is now a prerequisite for large-scale institutional adoption, even when it diverges from the ethos of DeFi.
The submit Citadel Securities Turns Against DeFi While Pouring $500 Million into Ripple appeared first on BeInCrypto.