Ondo Finance’s SEC Filing Could Open Doors for Tokenized Securities on Ethereum
Ondo Finance has recently filed a no-action request with the US Securities and Exchange Commission (SEC) in order to seek confirmation that recording securities entitlements on Ethereum Mainnet will not result in enforcement action. This filing comes just a few months after the SEC closed a two-year investigation into the company without pressing any charges.
The request made by Ondo marks a significant shift in the relationship between the platform and its regulator, showcasing a new level of collaboration and understanding.
Specifically, the filing pertains to Ondo Global Markets, a product offered by the company that allows non-US investors to access US-listed stocks and ETFs through tokenized notes. Ondo is not seeking to change securities laws or gain approval for tokenized securities in a broad sense. Instead, they are simply seeking confirmation from the SEC that they can proceed with recording certain securities entitlements in tokenized form on Ethereum Mainnet without facing enforcement action.
The purpose of this request is operational in nature. By utilizing blockchain technology, Ondo aims to enhance collateral monitoring, streamline creation-and-redemption workflows, and simplify reconciliation processes for OGM products. Importantly, the core legal structure of the product remains unchanged.
Obtaining a no-action letter from the SEC does not introduce new regulations. Rather, it provides documented confirmation that a specific model can move forward without waiting for formal rulemaking processes, setting a precedent for the broader RWA tokenization industry.
If the SEC approves Ondo’s model, it would mark the first formal regulatory acknowledgment that public blockchain infrastructure can operate within the US securities recordkeeping system. This would serve as a reference point for other tokenization firms operating in the space.
Under the leadership of chair Paul Atkins, the SEC has shifted towards a more collaborative approach, closing the investigation into Ondo and publicly supporting tokenization as a capital markets innovation.
As of now, ONDO token is trading at $0.25, experiencing a 2.83% increase over the past 24 hours, with a platform TVL of $3.55 billion. However, it remains 88% below its all-time high of $2.14.
The SEC has yet to respond to Ondo’s filing, but the industry is eagerly awaiting the outcome of this groundbreaking request.
