The most important crypto rule of 2026 isn't about crypto

The @SECGov has put forward a proposal that Wall Street is treating as an equities story. For crypto, it could be something larger.

On June 11, 2026, the SEC submitted an official proposal to rescind Rule 611 and Rule 610(e) of Regulation NMS. Rule 611 was implemented in 2005 as part of the broader Regulation NMS framework and mandates that trading venues route orders to the exchange offering the best available price. The rule requires trading venues, such as stock exchanges and broker-dealers, to prevent "trade-throughs," instances in which an order is executed at a worse price when a better price is available on another exchange. Rule 610(e) sits alongside it, prohibiting trading platforms from displaying quotations that lock or cross against prices shown on other exchanges.

Why This Matters for DeFi

The two rules were never designed with blockchain in mind, and that created a hard structural problem for tokenized equities. Automated market makers (AMMs) operate through bonding curves and liquidity pools, a technical design that prevents traditional intermarket order routing. An AMM cannot reference and respect the national best bid and offer at the moment of execution the way Rule 611 demands, and it cannot route intermarket sweep orders or halt a swap because a better quote sits on another exchange, leaving any pool holding a tokenized NMS stock to commit trade-throughs constantly and risk being treated as an illegal trading center.

Galaxy Digital's Head of Firmwide Research, Alex Thorn, called Rule 611 "one of the biggest structural barriers" to tokenized US equities trading in decentralized finance (DeFi). Removing it would shift the compliance burden. The SEC's proposed replacement is a principles-based best execution framework applied at the broker-dealer level rather than on every individual trade across venues. That shift is what makes AMM-based tokenized equities workable: brokers interfacing with DeFi pools would need to demonstrate policies reasonably designed to achieve best execution for clients overall, without needing to guarantee NBBO compliance on each atomic swap.

Bigger Picture: Project Crypto and What Comes Next

The regulatory proposal forms part of the SEC's expansive "Project Crypto" framework, initiated in August 2025, designed to establish more definitive guidelines for digital assets and distributed ledger technology within American capital markets. SEC Chairman Paul Atkins framed the move as a long-overdue correction. "After two decades of Rule 611, it is high time that the Commission review its unintended consequences that have hindered, rather than enhanced, the long-term growth of our markets," Atkins said.

The proposal is not yet final. It has entered the mandatory 60-day public comment period following its entry into the Federal Register, with institutional researchers expecting the repeal to be finalized and implemented by early 2027, and the SEC potentially granting tailored exemptive relief for tokenized stock pilots ahead of schedule. Open questions remain too. Tokenized NMS stocks still face unresolved issues on exchange and ATS registration, clearance, and settlement, and Thorn hopes the SEC's forthcoming "innovation exemption" will address many of these.

For now, the comment window is open and the clock is running.

Sources
The Block: SEC's proposal to scrap key NMS rules a major unlock for tokenized US stocks
Yahoo Finance: SEC Moves to Scrap Rule 611 and What It Means for Tokenized Stocks
The Crypto Times: SEC Proposes Scrapping Legacy Reg NMS Rules, Clearing Path for On-Chain Equities