The SEC tokenized stocks rule proposal, published Thursday, could strip out one of the last major structural barriers keeping US equities off DeFi rails. The regulator has moved to formally rescind two Regulation NMS provisions that have made AMM-based equity trading functionally illegal.
The specific rules on the table are Rule 611 and Rule 610(e) of Regulation NMS, per the SEC press release. Rule 611 is the trade-through prohibition, banning execution of a stock order at a worse price than is available on another exchange.
Rule 610(e) covers locking and crossing quotations, preventing an exchange from displaying a bid at or above a competing offer. Related defined terms in Rule 600 are also proposed for rescission. Together, these rules require any trading venue handling NMS stocks to route to the best available price across exchanges, a mechanism built for limit-order books rather than AMM pool pricing, where prices derive algorithmically from liquidity ratios.
Chairman Paul Atkins framed the move as an effort 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,’ according to the SEC press release.
That framing tracks with Atkins’ long-held position. A Skadden Arps analysis notes that Atkins was among the dissenting commissioners when Rule 611 was originally adopted, arguing at the time that the rule would not enhance market efficiency, would prevent best execution, constrain competition, and stifle innovation. He is now in position to act on that dissent.
For AMM-based DeFi protocols, the SEC tokenized stocks rule has been the primary legal obstacle: AMMs cannot dynamically reprice orders to match the best available price on a lit exchange, making compliance structurally impossible.
What the SEC Tokenized Stocks Rule Change Means for AMMs
Galaxy Digital head of research Alex Thorn called the proposal ‘one of the biggest unlocks yet for tokenized stocks,’ describing it as removing ‘one of the biggest structural barriers to tokenized US equities trading in DeFi.’ Under current rules, AMMs would commit trade-throughs constantly and, in Thorn’s reading, operate as illegal trading centres.
The SEC is expected to replace the rescinded rules with a best execution framework that could accommodate AMM mechanics, though the final shape of that replacement is not fixed. The proposal opens a 60-day comment period; the agency will review responses and may revise its position before any final rule.
DOJ Task Force Takes Aim at Crypto Crime
On the enforcement side, US lawmakers introduced the Federal Cryptocurrency Theft Enforcement and Coordination Act, a bill that would establish a Department of Justice-led task force to coordinate crypto crime investigations across federal, state, and local agencies.
Per the Rep. Gooden press release, the task force would be chaired by the Attorney General, with senior representatives from DHS, Treasury, and federal law enforcement, including the FBI and the Financial Crimes Enforcement Network. The bill, introduced by Republican Representative Lance Gooden and Democratic colleague Josh Gottheimer, directs the task force to develop best practices for blockchain forensics, asset tracing, evidence collection, and victim support, with training resources extended to state and local agencies. Crypto crime investigations currently span multiple federal agencies with no single coordinator, a gap the legislation aims to close.
The FBI reported Americans suffered more than $11 billion in crypto-related losses in 2025, part of a broader $21 billion in total cyber-enabled fraud that year, with crypto and AI-related scams among the costliest categories.
Hungary Reverses Its Crypto Crackdown
Hungary is moving to decriminalise crypto trading after its 2025 framework backfired. Government spokesperson Anita Köböl said at a Thursday press conference that Hungary would unwind rules requiring approved validation for crypto conversions and attaching criminal penalties to violations.
‘This was an unnecessary piece of legislation,’ Köböl said, according to a Cointelegraph translation. ‘It made practical operation impossible and frightened the market participants.’
Köböl said the restrictions contributed to a decline in trading activity and prompted several platforms, including Revolut, to suspend crypto services in the country. The rollback also follows a European Union probe into whether Hungary’s rules were compatible with bloc-wide standards. The rules were introduced after the EU’s Markets in Crypto-Assets (MiCA) regulation came into force, raising questions about member-state overlap with the single-market framework.
The 60-day comment window on the SEC tokenized stocks rule rescission is the next concrete milestone: the industry’s response will determine whether the final framework lands closer to an AMM-permissive best execution standard or something more constrained.
