Daily Observation on Cryptocurrency Regulation: Citadel Securities Voices Jurisdiction, Urges SEC and CFTC to End the Chaos of Derivative "Self-Certification"
Released on September 11, 2026. As on-chain prediction market event contracts and crypto perpetual contracts accelerate their penetration into the traditional securities field, top financial market makers on Wall Street have begun to actively engage in reshaping regulatory rules. Market-making giant Citadel Securities recently submitted a joint response document to the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC), clearly stating that the SEC should serve as the absolute primary regulatory authority for U.S. stocks and related products, urging regulators to expedite the approval efficiency of new products and to strictly prevent derivatives exchanges from using self-certification mechanisms to evade securities law jurisdiction.
Establishing Primary Regulatory Authority: U.S. Stock Products Must Be Unified Under SEC Oversight
In the context of continuous financial innovation across markets, market makers have expressed deep concerns about the ambiguity of rules brought about by multiple regulatory bodies.
Citadel Securities, one of the world's largest quantitative market-making institutions, has officially submitted a policy response document to the U.S. SEC and CFTC. In the document, Citadel Securities clearly states that the SEC should serve as the "Primary Regulator" for all financial derivatives related to U.S. listed companies and their underlying securities. This move aims to prevent market participants from exploiting regulatory gaps to package products involving underlying stock equities as general commodities, thereby undermining the disclosure and protection standards for the underlying securities market. Meanwhile, Citadel also urges the SEC to modernize its internal processes, comprehensively enhancing the timeliness and approval efficiency of new financial product filings and reviews, to avoid hindering compliant innovation due to administrative delays.
Plugging Regulatory Gaps: Strictly Prohibiting Exchanges from Abusing "Self-Certification" to Evade Jurisdiction
In response to certain derivatives and prediction market exchanges exploiting loopholes to bypass securities review, the document presents extremely sharp criticisms.
Citadel Securities emphasizes that no exchange should utilize the "Self-certification" mechanism under the CFTC framework to substantively evade the SEC's statutory regulatory jurisdiction. Under certain existing rules, some trading platforms tend to quickly launch new contracts highly linked to specific stocks or individual stock events by simply reporting to the CFTC and self-certifying rules. Citadel points out that this practice is essentially a legal circumvention of the U.S. investor protection system and must be corrected at the top-level institutional framework.
Clarifying Gray Areas: Classification of Equity-Linked Event Contracts and Perpetual Derivatives
As prediction markets and offshore perpetual contract models penetrate mainstream compliant finance, accurately defining the legal nature of these two types of cutting-edge assets has become an urgent issue.
Citadel calls for the two federal regulatory agencies to quickly collaborate to clarify the legal nature and regulatory responsibilities of these two core categories:
Equity-linked Event Contracts: Prediction contracts driven by real business events such as financial indicators of listed companies, changes in management, or stock trends must clarify whether they fall under security-based swaps;
Perpetual Derivatives: For the no-expiration perpetual contract mechanism originating from Web3 and widely popular worldwide, regulators need to establish a unified and clear regulatory classification for traditional financial institutions to engage with such tools, focusing on settlement mechanisms, margin requirements, and market-making liquidity rules.
Market-Making Giants Accelerate the Clearing of Digital Derivative Rules on Wall Street
Based on the policy games in Washington in mid-September, Citadel Securities' response document reflects the true attitude of traditional core market-making forces on Wall Street towards emerging financial derivatives. On one hand, market makers are eager to participate in providing liquidity for high-turnover tools such as tokenized stocks and perpetual contracts; on the other hand, they are extremely reliant on the stability and fairness of the rules, firmly opposing unlicensed platforms from eroding compliant market space through regulatory arbitrage. With proactive pressure from market-making institutions, the regulatory tug-of-war between the SEC and CFTC regarding event prediction markets and on-chain derivatives may see a critical inter-agency jurisdiction ruling in the second half of 2026.
Data Source: https://bbx.com/ Cryptocurrency Concept Stock Information Database, compiled based on global listed company announcements and SEC/TSE disclosure documents from yesterday.
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