SEC proposal to scrap Rule 611 could ease tokenized U.S. stock trading

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SEC proposal eases token trading

Highlights

The SEC proposes scrapping Rule 611 and Rule 610(e), potentially removing key barriers for tokenized U.S. equities trading in DeFi platforms.
Replacing current rules with a best-execution framework could legitimize automated market makers, which previously risked being treated as illegal trading centers under existing regulations.
The proposal is open for 60 days of feedback and aligns with the SEC's broader push—including Project Crypto launched in August 2025—to accommodate digital assets and blockchain in U.S. financial markets.

Market rule changes and tokenized trading

As reported by Cointelegraph, the U.S. Securities and Exchange Commission on Thursday proposes scrapping Rule 611, which bars trade-throughs, and Rule 610(e), which prevents exchanges from displaying a bid at the same or higher price than one available elsewhere.

Galaxy head of research Alex Thorn says the move is "one of the biggest unlocks yet for tokenized stocks" because it removes a structural barrier to tokenized U.S. equities trading in DeFi. He says automated market makers cannot comply with trade-through rules because they execute orders at the pool price and cannot halt a trade when a better quote exists on another venue.

Thorn adds that tokenized stock pools governed by the current framework would constantly risk trade-through violations and could arguably be treated as illegal trading centers. He also says AMM prices fluctuate continuously, putting them at odds with rules designed to ensure investors receive the best available price across platforms.

Implications for crypto market structure

The SEC is likely to replace the rules with a best-execution framework, Thorn says, a shift that could make room for AMMs under the regulatory structure. The agency is putting the proposal out for 60 days of feedback before reviewing responses and deciding whether to revise it.

The proposal fits into a broader SEC effort to roll back rules seen as limiting crypto and blockchain applications in financial markets. The agency launched Project Crypto in August 2025 to develop rules for digital assets and blockchain use in U.S. markets.

The latest move also follows reports that the SEC was set to release a plan last month to allow tokenized stock trading, but delayed it after stock exchange officials raised concerns about how the plan would work in practice.

In our earlier article on Coinbase’s partnership with MassPay, we covered the rollout of stablecoin-based cross-border payouts for enterprise clients and why it could expand real-world utility for digital assets. We also noted Coinbase’s push for clearer U.S. rules—such as advocating tax exemptions for stablecoin payments and backing the CLARITY Act—alongside a technical outlook that pointed to a potential momentum shift in COIN.

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