The Securities and Exchange Commission (SEC) tokenized stocks proposal, published Thursday, would rescind two Regulation NMS rules that currently make it structurally impossible for decentralised protocols to trade tokenized US equities without violating federal market structure law.
What the SEC Tokenized Stocks Proposal Actually Changes
The SEC is proposing to eliminate Rule 611 of Reg NMS, the trade-through prohibition, and Rule 610(e), which restricts locking and crossing quotations, along with related definitions in Rule 600. Under the current framework, an AMM would, by design, commit trade-throughs constantly and, as Galaxy Digital head of research Alex Thorn put it, ‘arguably be an illegal trading center.’
Thorn called the proposal ‘one of the biggest unlocks yet for tokenized stocks’ and said it would remove ‘one of the biggest structural barriers to tokenized US equities trading in DeFi.’ The SEC framed its own rationale in broader terms: the agency said the rescission is designed to ‘simplify market structure and reduce costs for market participants while allowing competition, innovation, and other market forces to shape the continuing evolution of our equity markets.’
Thorn added that the SEC is likely to replace the rescinded rules with a ‘best execution’ framework, which would provide a path for AMMs to operate legally. The proposal is open for public comment for 60 days, after which the SEC may revise the final rule in response.
For the tokenized equities space, the structural implication is direct. Protocols building on-chain orderbooks or AMM liquidity pools for tokenized US stocks have had no compliant route to operate under Reg NMS. Removing Rules 611 and 610(e) creates the regulatory floor they need, assuming any replacement best-execution standard is drafted with non-custodial infrastructure in mind.
A Task Force, an Annual Report, and $11 Billion in Losses
Separately, bipartisan legislation introduced in the House would establish a coordinated federal response to crypto crime. Rep. Lance Gooden, a Texas Republican, and Democratic colleague Rep. Josh Gottheimer introduced H.R.9276, which would create a Federal Cryptocurrency Theft Task Force housed within the Department of Justice.
The task force would be chaired by the Attorney General, with senior representatives drawn from the Department of Homeland Security, the Treasury, the FBI, and other federal law enforcement agencies. Its mandate covers criminal enforcement and coordination across federal, state, and local levels, and explicitly excludes regulatory reach over the industry, framing the effort as protecting innovation while targeting bad actors.
The bill would also require an annual report to Congress covering trends in crypto crime, investigative outcomes, and recommended actions. It directs the task force to develop standards for blockchain forensics, evidence collection, asset tracing, and victim support, and to provide training to state and local agencies.
Lawmakers cited the FBI’s 2025 Internet Crime Report as context, pointing to more than $11 billion in crypto-related losses reported by Americans last year. The broader IC3 dataset, summarised by WaterISAC, shows total IC3-reported losses of $20.8 billion across all cyber-enabled crime in 2025, a 26% increase from 2024, drawn from more than 1 million complaints. Investment fraud, largely crypto-related, accounted for the largest single category at over $8.6 billion.
CoinDesk confirmed the bill text designates the attorney general as task force chair.
Hungary Reverses Course After Criminal Law Backfires
Hungary is moving to decriminalise crypto trading after its 2025 framework, which required approved validation for crypto-to-fiat and crypto-to-crypto conversions and attached criminal penalties to violations, produced the opposite of its intended effect.
Tisza government spokesperson Anita Köböl, speaking at a Thursday press conference, said the restrictions had triggered a drop in domestic crypto activity and prompted multiple platforms, including Revolut, to suspend services in Hungary. ‘This was an unnecessary piece of legislation. It made practical operation impossible and frightened the market participants,’ Köböl said, according to a translation by Cointelegraph. ‘The criminal consequences also negatively impacted several hundred thousand people.’
Köböl added that the restrictions had drawn a European Union probe into whether Hungary’s rules were compatible with EU law. The reversal would unwind the criminal liability framework introduced last year and marks a full policy retreat from the government’s earlier position.
The 60-day comment window on the SEC’s Reg NMS rescission is the next live date to watch: the shape of any replacement best-execution standard will determine whether the proposal is genuinely AMM-compatible or just a removal of one barrier with another quietly inserted.
