21Shares Files for ONDO ETF Approval - Institutional Crypto Access Inches Closer

Another crypto ETF hits the regulatory runway. 21Shares, a heavyweight in the digital asset ETP space, has officially submitted an application to launch a spot exchange-traded fund for ONDO.

The Institutional Playbook Expands

This isn't just about adding another ticker. It's a calculated move to bridge traditional finance with the burgeoning world of real-world asset (RWA) tokenization. ONDO, focusing on tokenized treasury products, represents a specific, yield-bearing corner of crypto that has Wall Street's attention. An ETF wrapper is the golden ticket for big money—pension funds, asset managers—who need regulated, familiar vehicles to get exposure.

Cutting Through the Compliance Fog

The filing signals a relentless push for legitimacy. After the landmark approvals for Bitcoin and Ether ETFs, asset managers are now targeting niche, thematic crypto assets, betting that regulators' comfort level is rising. The process bypasses the need for investors to grapple with self-custody wallets or obscure exchanges, offering a clean, brokerage-account-friendly path instead.

Will the gatekeepers play ball? That's the billion-dollar question. The application now enters the grinding machinery of regulatory review, where optimism often meets the cold, hard reality of bureaucratic pace and shifting political winds. One cynical finance jab: It's the ultimate institutionalization play—taking a decentralized innovation and meticulously repackaging it into the very centralized, fee-generating product structure it was supposed to disrupt.

21Shares revises ONDO ETF proposal

According to the original S-1 document, 21Shares had indicated in their note that the trust WOULD be a passive fund. It would hold ONDO and use a third-party benchmark to track the dollar price of ONDO.

The first submission outlined shares would be created and redeemed through large blocks called “Baskets,” handled by broker-dealers. But the revised proposal designates basket size to blocks of 10,000 shares per basket. The basket size affects how market makers arbitrage premiums and discounts in the secondary market.

The amendment also says brokers can create shares by depositing cash with the fund’s cash custodian. The sponsor then automatically instructs a third party to buy the ONDO needed for that order and deliver the tokens into the fund’s custody accounts.

When an authorized participant redeems for cash, the sponsor directs a custodian to transfer ONDO to a designated counterparty, which sells the tokens and deposits cash proceeds back into the fund’s cash account for settlement. The prospectus states that any slippage or trading costs associated with cash creations or redemptions are borne by the Authorized Participant, not the trust or the sponsor.

While last July’s filing said the trust would custody ONDO at a single regulated third-party custodian, Coinbase, the amendment changes that to a dual-custodian model by adding BitGo Bank & Trust, N.A.

BitGo is a federally chartered national trust bank and received a national bank charter from the Office of the Comptroller of the Currency in December last year.

The S-1/A prospectus also introduces “Vault Balance” and distinguishes “Cold Vault Balance” from “Hot Vault Balance.” It says the sponsor expects assets and keys to be held in cold storage on an ongoing basis, with hot wallets used at times for settlement.

There are three review paths after the amendment, owing to the SEC’s new formal process for approving exchange-traded funds. The best-case scenario will see ONDO ETF’s registration go live 20 to 75 days after the amendment, putting the earliest window between late February and mid-April 2026.

Ondo Finance RWA footprint and WLF ties

ONDO has appeared in political headlines through World Liberty Financial, the DeFi project affiliated with President Donald Trump’s family. Last year, WLF bought $500,000 worth of the token for a multi-asset treasury.

In other related news, Consensys’ MetaMask has tapped Ondo Finance to offer tokenized securities. Per a press statement released by the wallet service provider on Tuesday, eligible MetaMask users in non-US countries now have access to 200 tokenized US stocks, ETFs, and commodities, including gold and silver, on Ethereum.

Users acquire the tokenized exposure through MetaMask Swaps by swapping Circle’s USDC stablecoin into Ondo Global Markets tokens. However, the product is not available for users in the United States, Canada, the United Kingdom, and several jurisdictions in the European Economic Area.

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