Ondo Finance Urges SEC to Postpone Nasdaq’s Tokenized Securities Initiative
Ondo Finance has called on the SEC to defer or reject Nasdaq’s plan for tokenized securities, highlighting concerns over transparency and equitable access.
Ondo Finance has requested that the US Securities and Exchange Commission (SEC) reconsider the proposal by Nasdaq for trading tokenized securities, arguing that the move lacks the necessary transparency and could unfairly advantage established entities.
In a letter sent to regulators, Ondo Finance, a company specializing in blockchain and tokenized asset issuance, emphasized that key details about the clearance processes by the Depository Trust Company (DTC) are crucial for both regulators and investors to adequately assess Nasdaq’s proposed changes, yet these details remain undisclosed. The DTC is integral to the US securities landscape, handling post-trade settlements.
While Ondo supported the broader trend toward tokenization, the firm cautioned that “the reference to non-public information by Nasdaq suggests unequal access, disadvantaging other companies.” Ondo also pointed out that Nasdaq’s proposal cannot proceed until the DTC finalizes its systems, advocating for a delay in the decision until additional functionalities have been clarified.
Nasdaq’s Proposal Context
The letter from Ondo comes in response to Nasdaq’s recent filing that seeks to modify its regulations to facilitate the trading of tokenized securities. If approved, these digital assets would trade alongside traditional stocks, with the DTC managing their settlements. This proposal is currently undergoing a 45-day review period by the SEC, which is set to conclude by early November unless extended.
The Rise of Tokenized Stocks
The discussion surrounding Nasdaq’s tokenization initiative coincides with several platforms launching or preparing to support tokenized versions of US stocks. For instance, Robinhood recently introduced a new blockchain layer for trading tokenized US stocks and ETFs, targeting European users with plans to offer over 200 on-chain tokens. Similarly, eToro is set to launch its own version of tokenized stocks.
As these developments unfold, they raise important questions about the future of trading and market dynamics in a rapidly evolving financial landscape.
