Hyperliquid News: HPC and Douro Labs Urge SEC to Drop Rule 611 The Hyperliquid Policy Center (HPC) and Douro Labs, a core contributor to the Pyth Network, have jointly filed a comment letter
The Hyperliquid Policy Center (HPC) and Douro Labs, a core contributor to the Pyth Network, have jointly filed a comment letter with the U.S. Securities and Exchange Commission (SEC) on August 17, 2026 in a development drawing fresh attention in hyperliquid news.
[Read the full SEC comment letter]
The filing landed under docket S7-2026-20 and responds to a proposal the SEC itself put out on June 11, 2026, one that would rescind Rule 611 along with the related locked-and-crossed markets prohibition under Rule 610(e).
It's one of the more closely watched developments in crypto news today, especially as regulators continue to rethink how on-chain trading fits into rules written two decades ago for a very different market.
This isn't just another comment letter; it's part of a broader push to get regulators thinking differently about how on-chain trading fits into the traditional market structure.
Rule 611 dates back to 2005, built around centralized quotations and the National Best Bid and Offer (NBBO) system.
In the latest hyperliquid news, HPC and Douro Labs argue that this framework simply doesn't translate to how automated market makers, on-chain order books, or round-the-clock trading actually work.
Their reasoning: NBBO goes quiet on nights, weekends, and holidays, while blockchain markets never really close.
Quick answer: The two organizations told that Rule 611's protected-quotation framework does not translate cleanly to public blockchains, where many venues do not produce traditional protected quotations and where the NBBO may be unavailable or inadequate as a benchmark for on-chain execution.
WuBlockchain also reported that HPC and Douro Labs supported repealing Rule 611 and proposed using independent on-chain reference prices, including Pyth, where NBBO does not apply.
Brandon H. Ferrick, general counsel at Douro Labs, and Brad Bourque, senior counsel at HPC, signed the letter. Copies went out to SEC Chairman Paul Atkins, Trading and Markets director Jamie Selway, and FINRA's Robert Colby.
This debate didn't start last week. SEC Commissioner Hester Peirce revisited Rule 611 at a September 2025 SEC roundtable, where she noted that critics blame for increasing complexity, fragmentation and costs.
SEC Chairman Paul Atkins, meanwhile, had previously dissented from the adoption of Regulation NMS in 2005.
A few things stand out from the filing:
If Rule 611 goes away, brokers would fall back on their existing best-execution duty instead of a strict trade-through check tied to NBBO.
Where NBBO simply doesn't apply, HPC wants regulators to accept transparent, manipulation-resistant on-chain price feeds, Pyth's included, as legitimate reference prices for routing orders.
On tokenized equities, the letter takes a more cautious stance. HPC says these instruments should stay fully covered by Regulation NMS and existing best-execution rules rather than getting an automatic pass just because they settle on a blockchain.
Rule 611 Framework (2005)
How on-chain Markets Work
Built around NBBO across exchanges
No single consolidated quote feed
Quotes update during market hours
Trading never really stops
Assumes visible bid and offer quotes
Prices often set by formula, not quotes
Settlement takes a day (T+1)
Trades settle almost instantly
For hyperliquid news watchers, the comment window on the SEC's Rule 611 proposal has already closed, so the ball is now in the Commission's court.
There's no final decision yet, and it's not clear how soon one might come. Whether the agency ends up adopting some kind of principles-based guidance for on-chain pricing, as HPC has asked for, remains to be seen.
The development is also relevant to broader crypto news, as decentralized-market advocates continue pushing for regulatory frameworks that account for on-chain venues rather than simply retrofitting standards built for traditional exchanges.
A more flexible, principles-based approach to best execution could give platforms like Hyperliquid, a key focus of hyperliquid news, along with pricing infrastructure such as Pyth, a bigger role in how brokers route orders. Nothing's confirmed yet.
The SEC hasn't offered a timeline, and real changes to Regulation NMS are likely still months away.
Disclaimer: This article is for informational purposes only and isn't investment, legal, or financial advice. The regulatory outcomes discussed here are still proposals and could shift depending on the SEC's eventual ruling.
