The SEC just took aim at one of the most entrenched rules in US equity markets, and the crypto world is paying attention.
On June 11, the Securities and Exchange Commission formally proposed rescinding Rule 611 of Regulation NMS, the so-called “Order Protection Rule” that has governed how stock orders are routed since 2005. Along with it, the SEC proposed killing Rule 610(e), which bans locked and crossed quotations.
For tokenized stocks, the implications are hard to overstate.
Galaxy Digital’s head of research Alex Thorn called the proposal “one of the biggest unlocks yet for tokenized stocks,” describing Rule 611 as “one of the biggest structural barriers to tokenized US equities trading in DeFi.” The proposal now enters a 60-day public comment period before the SEC moves toward a final rule.
Why This Matters for DeFi
Rule 611 requires that every equity trade execute at the National Best Bid and Offer (NBBO) across all registered exchanges. The problem? Automated market makers, the backbone of DeFi trading, can’t structurally comply with this requirement. AMMs price assets based on liquidity pools, not exchange order books. Under Rule 611, running an AMM for tokenized US stocks has essentially been illegal.
Kill the rule, and suddenly DeFi protocols have a clear path to offering tokenized equities without running afoul of trade-through restrictions that were never designed for their architecture.
This sits squarely within the SEC’s broader “Project Crypto” initiative launched in August 2025, aimed at modernizing the regulatory framework for digital assets and blockchain technology in US markets. If finalized, Rule 611’s repeal would be the most consequential piece of that puzzle yet.
The proposal signals a genuinely different tone from the current SEC leadership: less enforcement-first, more let-market-forces-figure-it-out. Whether that survives the comment period and potential legal challenges remains to be seen. But the direction of travel is clear.
