Ondo Finance seeks SEC clarity for tokenized securities

Ondo Finance seeks SEC clarity for tokenizing securities entitlements on Ethereum, targeting non-U.S. investors and enhancing operational efficiency while preserving legal and custody frameworks.

Ondo Finance has submitted a no-action letter request to the U.S. Securities and Exchange Commission (SEC) for its Ondo Global Markets (OGM) platform. The company seeks regulatory clarity for a model that records certain securities entitlements as tokens on the Ethereum Mainnet. This proposal does not aim to change existing securities laws or broadly approve all tokenized assets. Instead, it introduces a tokenized operational layer while maintaining official books, records, and legal frameworks. BitGo is designated as the custodian for these tokenized entitlements. The model specifically targets non-U.S. investors, offering tokenized notes linked to U.S.-listed stocks and ETFs, with the underlying assets remaining within established custody systems. Ondo Finance emphasizes that this is an operational enhancement to improve collateral monitoring, subscription and redemption processes, and reconciliation, without altering investor protections or the core legal structure. If the SEC grants the no-action request, it could set a precedent for integrating traditional securities with public blockchain technology.