The SEC has floated a rule change that would drop “key” National Market System (NMS) requirements. Galaxy’s Alex Thorn says the move would make it easier for DeFi automated market makers to trade tokenized US equities at scale, by removing barriers tied to those NMS rules.
Thorn’s point is specific. In a statement cited by The Block, he frames the proposal as a way to eliminate constraints that kept DeFi AMMs from getting enough volume and integration for tokenized US stocks.
What the SEC is trying to unwind
The core issue is that NMS rules exist to standardize how US equities markets operate. They also create compliance and operational requirements that can be hard for external venues to mirror, especially when the trading system lives on-chain.
By proposing to scrap key NMS rules, the SEC is essentially loosening the ruleset that tokenization projects and trading venues would have to fit into, The Block reports.
That matters because tokenized equities trading is not just a technical question. It’s a question of how a venue can interact with existing market structure without tripping over rule obligations.
Why DeFi AMMs care
Galaxy’s Thorn argues the changes would remove barriers that “prevented DeFi automated market makers from trading tokenized US equities at scale,” The Block reports.
prevented DeFi automated market makers from trading tokenized US equities at scale,
DeFi AMMs typically win on continuous liquidity and mechanical execution. But when off-chain market-structure requirements are rigid, AMMs can end up with stuck liquidity, thin pools, or limited integration paths. Thorn’s argument suggests the SEC proposal targets one of the biggest reasons AMMs remain niche for tokenized US stock trading.
In practical terms, if the SEC reduces the NMS constraints a tokenized-stock venue has to meet, DeFi market makers may be able to connect more easily, run larger systems, and support more trading activity. That’s not a guarantee of growth. It is a reduction in regulatory friction, which is often what slow adoption in this corner of crypto.
The compliance clock readers should watch
The Block frames this story around an SEC proposal and the market-structure rules it would scrap. For anyone building or evaluating tokenized equities trading, the next question is timing.
A proposal is not an order. It still has a process. Readers should expect at least a comment period and potential revisions before anything becomes operative.
Watch for what regulators do next with the rule text. When agencies cut or modify market-structure requirements, the details control who can comply with less work and who still has to jump through hoops.
What this doesn’t solve
Even if NMS barriers fall away, tokenized US equities trading still faces other hurdles that are outside the NMS rules themselves. The Block’s cited comment from Thorn focuses on scale limits tied to NMS constraints, not on custody, settlement design, investor protections, or issuer compliance.
Those issues can still cap how much liquidity an on-chain venue can attract or how broadly it can operate.
In other words, the SEC proposal could remove one major obstacle. But it cannot make every other problem disappear.
Analyst view, sourced and limited
Galaxy’s Thorn is the only named analyst voice in the provided The Block excerpt. The claim is clear about purpose. Remove NMS-linked barriers so DeFi AMMs can trade tokenized US equities at scale.
The coverage does not include additional quantified impacts or comparisons to past rule changes. Readers should treat Thorn’s assessment as an interpretation of the proposal’s regulatory effect, not a timetable or outcome.
For tokenized equity market watchers, the useful next step is to read the actual proposal text. That will show which NMS requirements are being scrapped and how the SEC expects remaining market-structure obligations to apply.