The SEC just used crypto to justify deregulating equities
But you would have to read a 267 page proposed Rule Recission to figure that out
Last week the SEC proposed rescinding Rule 611 of Reg NMS, the Order Protection Rule that has governed how equity orders are routed since 2005.
The financial press covered it as a market structure story.
It is that, but the more interesting part is buried in the justification. The SEC’s own release argues that U.S. equity markets have failed to adopt mechanisms that “emerged naturally in crypto”: intents-based trading, automated market makers, decentralized price oracles, and atomic cross-domain settlement. It cites these approvingly, not as risks to be managed, but as innovations that prescriptive rules like Rule 611 have prevented.
That sentence in a formal SEC proposing release is worth reading closely.
Rule 611 required trading venues to avoid executing orders at prices inferior to protected quotes displayed elsewhere. When it was written, the internet was eleven years old and algorithmic trading was a novelty. The rule created enormous compliance infrastructure, contributed to exchange proliferation across seventeen venues, and produced the kind of fragmentation it was meant to prevent.
The SEC’s argument now is that none of that complexity is necessary given how fast and interconnected markets actually are, and that broker ‘best execution’ obligations are a sufficient backstop.
For tokenization practitioners, the direct effect is narrow: Rule 611 applies to NMS stocks, meaning exchange-listed public equities. Most tokenized securities in market today, including everything issued under Reg D, Reg A, or Reg S, are exempt offerings and were never subject to it.
If you’re building on Vertalo, this rule change does not affect your current infrastructure. What it does affect is the five-year picture. A tokenized public equity, once it becomes an exchange-listed NMS stock, would no longer need to navigate trade-through compliance or maintain intermarket sweep order infrastructure.
For any venue operator building tokenized equity trading, that’s a meaningful cost reduction - and cost is measured in time as much as in treasure.
More importantly, it opens the door to trading protocol designs that the old rules made legally precarious: something that behaves like an AMM for registered equities, for example, or intent-based settlement where a buyer and seller atomically exchange a security for cash on-chain without routing through a traditional market center.
The SEC is also cross-referencing its January 2026 Statement on Tokenized Securities in the same release. That statement was the first formal acknowledgment that issuing a security as a tokenized instrument does not automatically change its legal character. When you pair these two seemingly un-related documents you get a picture of an SEC that is, for the first time in a long time, building a conceptual framework for tokenized public equities - rather than just sending Wells notices.
None of this is an explicit green light. There is still no clear registration path for a tokenized NMS stock, no custody rules written for on-chain settlement, and no exchange application framework that accounts for blockchain-native market structure. The rule rescission removes an obstacle; it does not build the infrastructure and that doesn’t happen just because of a rule recission. But the direction of travel is different than it was eighteen months ago, and the language the SEC is using to describe crypto-native mechanisms has changed from “enforcement risk” to “innovation we want in traditional markets.”
Popcorn time! And worth tracking.
Dave Hendricks is the founder and CEO of Vertalo, which has operated a continuous, integrated transfer agent and tokenization platform for eight years.