SEC Proposes Trade-Through Rule Repeal, Paving Way for On-Chain Equity Trading

The U.S. Securities and Exchange Commission (SEC) has proposed eliminating the 'trade-through' rule, which governs U.S. stock markets. This regulation mandates that investors receive the best possible price for their transactions.

The trade-through rule has historically been a major barrier for decentralized finance (DeFi) platforms attempting to list tokenized equities. Crypto exchanges trying to trade regulated U.S. stocks under current rules would be committing 'trade-throughs' constantly, making their operations legally precarious.

By rescinding this rule, the SEC is opening the door for a wave of regulated, on-chain equity trading. Industry experts see this as a significant shift, with firms like Galaxy Digital and Coinbase reacting enthusiastically to the change.

Supporters argue that the rule prioritizes outdated price-matching metrics over modern requirements of liquidity and order execution. SEC Chairman Paul Atkins notes that this regulatory change will help maintain global financial competitiveness.