Ondo Finance Seeks SEC Approval for Tokenized Securities on Ethereum

Ethereum News

Ondo Finance has asked the U.S. Securities and Exchange Commission to confirm it will not pursue enforcement action against a proposed model for recording securities entitlements on Ethereum. The firm submitteda no-action letter request to the SEC on Monday. The request is tied to its Ondo Global Markets platform, which sells tokenized notes that give non-U.S. investors access to U.S.-listed stocks and ETFs. Tokenization

Under the proposed model, the underlying equities would remain held through the Depository Trust Companyhereum network to represent corresponding securities entitlements. Those tokens would be used to manage collateral and maintain records in sync with the off-chain holdings

The key operational change is a shift in how those entitlements are tracked and administered. Rather than relying on traditional record-keeping alone, Ondo would use Ethereum-based tokens to perform that function on-chain. The no-action request asks the SEC to confirm that this structure would not require broker-dealer registration.

U.S. regulators have shown increasing openness to tokenized financial products in recent months. SEC Commissioner Hester Peirce has publicly encouraged firms to engage directly with the agency when exploring tokenized offerings. At a recent House Financial Services Committee hearing, Representative Andy Barr said tokenization of securities is coming and called for investor protections to be preserved as the market develops.

The SEC has already approved a rule change that allows Nasdaq to support tokenized share trading. Firms such as the New York Stock Exchange, Robinhood, Kraken, and Coinbase are each advancing their own on-chain equities products. The agency has said it is developing formal rules while issuing interim guidance in the meantime.

The tokenized real-world asset market currently stands at roughly $23 billion. Ondo accounts for approximately $2.8 billion of that total. Analyst projections for the broader sector range from $2 trillion to more than $10 trillion by 2030.

The SEC has not publicly responded to the request. No-action letters do not carry the force of formal rules and can be withdrawn or revised by the agency. Ondo’s filing represents one of several attempts by firms to establish regulatory clarity as the legal framework for tokenized securities continues to develop.

This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.

Source: coinmarketcap.com