Paul Atkins

Scrap

Rule

Ondo

<p>Blockchain Association filed a <a href="https://theblockchainassociation.org/api/media/file/BA%20-%20SEC%20Comment%20Letter.pdf" rel="noopener noreferrer nofollow">comment letter</a> with the Securities and Exchange Commission on August 17 supporting the agency’s plan to rescind two Regulation NMS rules, and part of its case rests on a paper from Douro Labs, a firm founded by former Jump Crypto specialists whose parent company already trades tokenized stocks.</p>
<blockquote class="twitter-tweet">
 <p>1/ Today, we submitted a comment letter to the <a href="https://x.com/SECGov?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">@SECGov</a> supporting its proposal to rescind outdated provisions of Regulation NMS – Rules 611 and 610(e).</p>
 <p>These rules were built for markets of 2005. It’s time for market structure to catch up with technology. <img src="https://s.w.org/images/core/emoji/17.0.2/72x72/1f9f5.png" alt="🧵" style="height: 1em; max-height: 1em;">… <a href="https://t.co/f6nEyZa2sP" rel="noopener noreferrer nofollow">pic.twitter.com/f6nEyZa2sP</a></p>
 <p>— Blockchain Association (@BlockchainAssn) <a href="https://x.com/BlockchainAssn/status/2089525695261364718?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">August 18, 2026</a></p>
</blockquote>
<p>The letter, signed by Blockchain Association chief executive Summer Mersinger and addressed to SEC Secretary Vanessa Countryman, backs the Commission’s <a href="https://www.sec.gov/newsroom/press-releases/2026-54-sec-proposes-rescission-regulation-nms-rules-611-610e" rel="noopener noreferrer nofollow">June 11 proposal</a> to eliminate Rule 611, the trade-through rule, and Rule 610(e), which restricts locked and crossed quotes. Both date to 2005. Blockchain Association argues they were built for a market structure that automation and interconnected trading venues have since made obsolete.</p>
<p>The group’s asks go beyond a simple yes to the SEC’s proposal. It wants the Commission to adopt the rescissions as written, issue new best-execution guidance that weighs factors like settlement finality and self-custody alongside price, clarify how tokenized assets fit the legal definition of an NMS security, address how on-chain settlement reports fit existing post-trade rules, and align pricing rules with stablecoin-denominated markets.</p>
<p>To support the claim that current rules block blockchain-based trading models, the letter cites a February 2026 paper from Douro Labs on-chain execution and an April 2026 paper from Jump Crypto researchers on automated market makers. Douro Labs was founded by specialists who left Jump Crypto, a crypto market maker.</p>
<p>Jump Trading Group <a href="https://www.prnewswire.com/news-releases/securitize-jump-trading-group-and-jupiter-launch-fully-onchain-regulated-trading-for-tokenized-equities-302762248.html" rel="noopener noreferrer nofollow">announced in May 2026</a> that it had partnered with Securitize and Jupiter to launch regulated, on-chain trading of tokenized equities, with Jump supplying liquidity through its own automated market maker. That means the firm whose researchers Blockchain Association cites has a live commercial venture that stands to benefit directly if the SEC removes the rules the letter is attacking.</p>
<p>The table below breaks down all six sources the letter cites and what each publisher has at stake.</p>
<table>
 <thead>
  <tr>
   <th>Citation in the letter</th>
   <th>Cited for</th>
   <th>Publisher</th>
   <th>Publisher’s stake in the outcome</th>
  </tr>
 </thead>
 <tbody>
  <tr>
   <td>Phil Mackintosh, “Demystifying Order Types,” KCG Holdings (2014)</td>
   <td>324 distinct order-type permutations across 11 exchanges</td>
   <td>KCG Holdings, a market-making firm</td>
   <td>None disclosed; predates the tokenization debate</td>
  </tr>
  <tr>
   <td>Li, Ye and Zheng, NBER Working Paper No. 28515 (2021)</td>
   <td>57% of volume from routing-averse order types</td>
   <td>Academic researchers</td>
   <td>None disclosed</td>
  </tr>
  <tr>
   <td>Douro Labs, “Beyond Reg. NMS” (Feb. 2026)</td>
   <td>On-chain execution models</td>
   <td>Douro Labs, founded by ex-Jump Crypto staff</td>
   <td>Direct, through Jump’s tokenized-stock venture</td>
  </tr>
  <tr>
   <td>Latif and Gerhardstein, “PropAMMs” (Apr. 2026)</td>
   <td>Permissionless market structure</td>
   <td>Jump Crypto</td>
   <td>Direct, same firm</td>
  </tr>
  <tr>
   <td>Cboe Global Markets (Nov. 2025)</td>
   <td>51.2% off-exchange trading volume</td>
   <td>Cboe, an exchange operator</td>
   <td>Indirect, general market-structure interest</td>
  </tr>
  <tr>
   <td>RWA.xyz (accessed Aug. 2026)</td>
   <td>$2.4 billion tokenized stock market cap</td>
   <td>RWA.xyz, a tokenization data platform</td>
   <td>Indirect, business built on tokenization’s growth</td>
  </tr>
 </tbody>
</table>
<p>Four of the six sources come from firms with something to gain from tokenization’s expansion. Only the KCG paper and the NBER study have no apparent stake in the outcome, and the KCG paper predates the current tokenization market by more than a decade.</p>
<p>Blockchain Association is not the only firm pressing this argument on the same docket. Ondo Finance filed its own <a href="https://www.sec.gov/comments/S7-2026-20/s7202620-999039-3151768.pdf" rel="noopener noreferrer nofollow">comment letter</a> on August 11, also backing rescission, and asked the SEC to go further than Blockchain Association did.</p>
<p>Ondo wants the Commission to formally recognize competed request-for-quote trading as a compliant execution method, pointing to how it already works in Treasury and corporate bond markets, and to clarify that “open, fixed-logic, non-custodial” execution infrastructure can operate without broker-dealer registration.</p>
<h2 id="what-the-rescission-could-change-for-on-chain-trading">What the Rescission Could Change for On-Chain Trading</h2>
<p>Read together, the two letters show what rescission would actually change for on-chain trading models specifically.</p>
<table>
 <thead>
  <tr>
   <th>Execution model</th>
   <th>Under current Rules 611/610(e)</th>
   <th>If rescinded, per the letters</th>
  </tr>
 </thead>
 <tbody>
  <tr>
   <td>Automated market makers</td>
   <td>Not compatible with the trade-through framework</td>
   <td>Could operate as a recognized execution venue</td>
  </tr>
  <tr>
   <td>On-chain order books</td>
   <td>Same incompatibility</td>
   <td>Would qualify under the proposed rescission</td>
  </tr>
  <tr>
   <td>Request-for-quote protocols</td>
   <td>Not recognized as compliant</td>
   <td>Ondo asks the SEC to formally recognize it</td>
  </tr>
  <tr>
   <td>Non-custodial execution infrastructure</td>
   <td>Registration status unclear</td>
   <td>Ondo asks for confirmation it can run unregistered</td>
  </tr>
 </tbody>
</table>
<p>It is a request for regulatory room for the specific on-chain trading models that Blockchain Association’s and Ondo’s own members are building.</p>
<p>The <a href="https://www.sec.gov/files/rules/proposed/2026/34-105655.pdf" rel="noopener noreferrer nofollow">Presidential Working Group’s July 2025 report</a> on digital asset markets recommended changes to Regulation NMS, and SEC staff issued a <a href="https://www.sec.gov/newsroom/speeches-statements/corp-fin-statement-tokenized-securities-012826-statement-tokenized-securities" rel="noopener noreferrer nofollow">statement in January</a> 2026 laying out how tokenized securities fit existing law.</p>
<p>SEC Chairman Paul Atkins framed the June proposal in his own terms, saying that after two decades of Rule 611, “it is high time that the Commission review its unintended consequences that have hindered, rather than enhanced, the long-term growth of our markets.”</p>
<h2 id="regulation-nms-rescission-timeline">Regulation NMS Rescission Timeline</h2>
<table>
 <thead>
  <tr>
   <th>Date</th>
   <th>Event</th>
  </tr>
 </thead>
 <tbody>
  <tr>
   <td>July 30, 2025</td>
   <td>Presidential Working Group report recommends Regulation NMS changes</td>
  </tr>
  <tr>
   <td>Jan. 28, 2026</td>
   <td>SEC staff issue statement on tokenized securities</td>
  </tr>
  <tr>
   <td>June 11, 2026</td>
   <td>SEC proposes rescinding Rules 611 and 610(e)</td>
  </tr>
  <tr>
   <td>June 17, 2026</td>
   <td>Proposal published in the <a href="https://www.federalregister.gov/documents/2026/06/17/2026-12163/the-trade-through-rule-and-locked-and-crossed-markets-provisions-of-regulation-nms" rel="noopener noreferrer nofollow">Federal Register</a>, opening the comment period</td>
  </tr>
  <tr>
   <td>Aug. 11, 2026</td>
   <td>Ondo Finance files its comment letter</td>
  </tr>
  <tr>
   <td>Aug. 17, 2026</td>
   <td>Blockchain Association files its comment letter</td>
  </tr>
 </tbody>
</table>
<p>The SEC’s comment period stayed open through mid-August, with new letters still arriving as recently as this week. Nothing in Blockchain Association’s letter discloses Jump Crypto’s commercial position in tokenized-stock trading.</p>
<p>The Blockchain Association has pushed back against the <a href="https://cryip.co/blockchain-association-rebuts-sheriffs-clarity-act-claims/" rel="noopener noreferrer nofollow">National Sheriffs’ Association’s</a> claims about the Clarity Act, arguing that the bill preserves anti-money laundering, sanctions and law enforcement authorities while establishing a regulatory framework for digital asset intermediaries.</p>

Blockchain Association Urges SEC to Scrap Rules 611 and 610(e)

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