Wall Street Divided on Crypto as 2026 Regulatory Clashes Loom
Citadel Securities sent a letter in December to the SEC urging a reconsideration of exemptive relief for crypto, warning that such relief could override investor protections and calling for decentralized finance (DeFi) activity to be monitored by regulators.
Amanda Tuminelli of the DeFi Education Fund expects traditional finance (TradFi) firms to sue over crypto regulatory victories, signaling that litigation is imminent despite the apparent support of the SEC for cryptocurrency.
Nasdaq and other traditional finance firms have urged the SEC to abandon its plans to grant crypto exemptions. However, TradFi is not monolithic; some firms, including Fidelity, are embracing crypto to reduce costs and possibly navigate around regulations.
Industry insiders anticipate that tensions between crypto and TradFi will peak during 2026 SEC and CFTC rulemaking, with potential for a direct confrontation.
The GENIUS Act's stablecoin reward provisions faced opposition from the banking lobby. Although the bill passed Congress, banks are seeking retroactive adjustments while the Trump administration remains unmoved.
Wall Street is increasingly split over crypto, with some firms viewing it as a threat while others see blockchain as an opportunity.
