SEC’s Rule 611 Exit Could Ignite Tokenized US Stocks, Says Galaxy

• SEC may scrap Rule 611, easing trade rules for tokenized U.S. stocks.
• Rule 611 repeal could favor AMM-based trading in tokenized markets.
• Tokenized stocks could face fewer market-structure hurdles if approved.

The U.S. Securities and Exchange Commission (SEC) recently announced a significant change in the rules and regulations governing equity markets. 

Consequently, this bold pivot could dramatically accelerate the integration of traditional real-world assets into decentralized finance networks. 

SEC Regulatory Shift Could Tokenize Wall Street Assets

The SEC proposed to eliminate two provisions from its national market system regulations. 

Rule 611 prohibits “trade-throughs,” in which a stock order on one exchange cannot be at a lower price than on another, and Rule 610(e) forbids exchanges from advertising a bid at the same or higher price than what is available elsewhere.

Galaxy’s head of research, Alex Thorn, described the plan as “one of the biggest unlocks yet for tokenised stocks” since it would remove “one of the biggest structural barriers to tokenised US equities trading in DeFi.”

the SEC just proposed rescinding Rule 611 of Reg NMS, the trade-through rule that has defined US equity market structure since 2005

this is a tradfi story, yes, but this is also one of the biggest unlocks yet for tokenized stocks 👇 pic.twitter.com/T0PJvWxysI

— Alex Thorn (@intangiblecoins) June 11, 2026

This rigid trade-through prevention mechanism creates severe compliance bottlenecks for protocols that settle trades on public distributed ledgers. 

As such, if this particular limitation is removed, on-chain venues will be able to enable stock trading without incurring any immediate regulatory penalties.

Additionally, this regulatory update is a significant win for the digital asset industry in terms of market structure transformation. 

Rule 611 Elimination May Tokenize Decentralized Liquidity Pools

Automated market makers (AMMs) cannot easily comply with legacy trade-through laws because of their algorithmic nature. 

The decentralized protocols, of course, execute trades with deterministic math formulas with isolated, on-chain liquidity reserves. 

This would effectively make native on-chain pools illegal trading platforms.

Furthermore, regular asset prices in the AMM trade constantly according to the particular local market forces. 

These algorithmic fluctuations mean that decentralized platforms would constantly violate the strict best-price mandates of Rule 611. 

But the agency is aiming to shift to a flexible ‘best execution’ policy that will allow automated pools.

This new best-execution framework should enable safe trading in the secondary market for compliant smart contracts.

Modernized market structures to tokenize mainstream finance

This regulatory update is pretty aligned with Project Crypto, an internal agency initiative that started in mid 2025. 

This broader promotional push aims to integrate distributed ledger technology into the overall financial system across the United States.  

So, the intended move to roll back the regulations is a cornerstone in the modernization of old infrastructure.

Big legacy stock exchanges’ worries once stalled early equity on-chain programs, by regulators. 

Still, the freshly proposed sixty-day public feedback window lets market participants fine tune the technical execution guidelines. 

Once those details get finalized, the changes should provide crisp operational guardrails for issuers who want to tokenize conventional financial instruments.  

Overall, easing these compliance obstacles reduces the everyday structural friction that had earlier slowed institutional asset migration.