Blockchain Association pushes SEC to overhaul legacy trading rules

The industry group is targeting Rules 611 and 610(e), which currently mandate that trading venues prioritize the best displayed price across all registered exchanges. The Association contends that these requirements—designed for a fragmented equity market—are ill-suited for blockchain systems where execution, ownership, and settlement happen simultaneously. By forcing tokenized platforms to adhere to these legacy standards, the SEC is effectively obstructing potential benefits like 24/7 trading, immediate settlement, and increased transparency.

While the SEC’s proposal to repeal these rules aims to simplify market structure and reduce costs, it has sparked significant debate. Critics fear that removing Rule 611, the so-called Order Protection Rule, could expose retail investors to inferior execution prices and increase conflicts of interest in order routing. Conversely, the Blockchain Association maintains that price should not be the sole metric for success, advocating for a broader definition of execution quality that accounts for transaction fees, speed, and counterparty risk. As the Commission weighs these arguments, the debate highlights the growing friction between traditional regulatory frameworks and the rise of on-chain finance.