The groups argue a decades-old equities rule is ill-suited to blockchain-based trading venues.
The Hyperliquid Policy Center and Douro Labs have formally urged the Securities and Exchange Commission to repeal the trade-through rule as it applies to onchain trading venues. Douro Labs is a contributor to the Pyth network, an oracle provider widely used across decentralized finance.
The trade-through rule, part of Regulation NMS, requires brokers to route orders to the venue offering the best available price. It was designed decades ago for traditional equity markets, where trading happens across a limited number of regulated exchanges. Critics argue the rule does not translate cleanly to blockchain-based markets, where trading occurs continuously across many decentralized venues with different liquidity pools and settlement mechanics.
According to the groups' request, applying the rule to onchain markets could create compliance burdens without delivering the investor protections it was originally meant to provide. They contend that decentralized exchanges already offer transparent, verifiable pricing through public blockchains, reducing the need for the same routing obligations imposed on centralized brokers.
The push comes amid a wider industry effort to get U.S. regulators to draft market-structure rules specific to crypto and onchain finance, rather than applying legacy frameworks built for stocks and bonds. Industry groups have repeatedly argued that rules like trade-through were never designed with 24/7, globally accessible trading systems in mind.
Hyperliquid operates a decentralized derivatives exchange that has grown rapidly in trading volume, positioning it as one of the more visible onchain venues affected by how the SEC ultimately treats market-structure questions. Douro Labs' involvement brings in a perspective tied to blockchain price-oracle infrastructure, which underpins trading and settlement across many decentralized platforms.
The SEC has not publicly responded to the specific request as of this reporting. Regulatory attitudes toward crypto market structure have shifted over the past year, with the agency engaging more directly with industry stakeholders on rulemaking questions than in prior periods.
Market Impact
A repeal of the trade-through rule for onchain markets, if pursued by the SEC, could ease compliance requirements for decentralized exchanges and their liquidity providers. That would potentially lower barriers for platforms like Hyperliquid to scale trading activity without adapting to routing obligations built for centralized markets.
More broadly, the request signals continued lobbying from crypto-native firms seeking regulatory frameworks tailored to blockchain-based trading rather than retrofitted equity rules. Any SEC movement on this front would likely be watched closely by other decentralized exchanges, oracle providers, and market-makers operating in onchain finance.
The request marks another step in ongoing efforts to align U.S. securities rules with the realities of blockchain-based trading. Whether the SEC acts on the proposal will shape how decentralized exchanges operate under future market-structure oversight.
Frequently Asked Questions
What is the trade-through rule?
It is a provision of Regulation NMS requiring brokers to route stock orders to the venue offering the best displayed price, originally designed for traditional equity markets.
Who is asking the SEC to repeal it for onchain markets?
The Hyperliquid Policy Center and Douro Labs, a contributor to the Pyth oracle network, submitted the request.
Why do they say the rule doesn't fit decentralized exchanges?
They argue onchain venues already provide transparent, verifiable pricing through public blockchains, making routing obligations built for centralized stock exchanges unnecessary or burdensome.
Has the SEC responded to the request?
As of this reporting, the SEC has not issued a public response to the specific proposal from the Hyperliquid Policy Center and Douro Labs.