Ondo Finance Demands Clear Rules for Digital Asset Securities from SEC
Ondo Finance just threw down the gauntlet. The tokenization heavyweight is publicly demanding the SEC finally deliver clear, actionable rules for digital asset securities—and the market is watching.
The Regulatory Standoff
For years, the crypto industry has operated in a gray zone. Projects build, innovate, and launch, all while navigating a regulatory landscape defined more by enforcement actions than by rulebooks. Ondo's move cuts through the ambiguity. It's not a request; it's a demand for the clarity needed for institutional capital to flow without fear.
Why This Matters Now
The timing isn't accidental. With real-world assets (RWAs) and tokenization capturing Wall Street's attention, the lack of a defined playbook is becoming a critical bottleneck. How can trillion-dollar balance sheets commit when the goalposts might move? Ondo's push highlights a simple truth: regulation via lawsuit stifles the very innovation the U.S. claims to champion.
The Institutional Imperative
Traditional finance craves certainty. It's the lifeblood of billion-dollar deals. Without clear SEC guidelines on what constitutes a digital security—from issuance to secondary trading—mainstream adoption hits a wall. Ondo's call signals that leading builders are done waiting. They're forcing the issue, betting that public pressure will accelerate what closed-door meetings have not.
A Jab at the Old Guard
Let's be real—the SEC's approach sometimes feels less about investor protection and more about protecting legacy intermediaries from disruption. It's the classic regulatory playbook: move slow, litigate often, and let the incumbents breathe easy.
The Bottom Line
Ondo Finance isn't just asking for permission. It's demanding a framework. The ball is now in the SEC's court. Will they provide the rules of the road, or will they continue governing through headlines and legal surprises? The future of a multi-trillion-dollar asset class might just depend on the answer.
Safety and compliance of tokenized U.S. Treasuries
Ondo Finance emphasized that tokenized U.S. Treasuries and similar products can operate securely and compliantly under current rules. The filing called for regulatory flexibility, particularly in support of what the firm terms both “direct and intermediated pathways” for tokenized securities.
The latter includes models where the tokens represent securities entitlements held through existing infrastructure, such as the Depository Trust Company (DTC). ONDO argued that the use of public, permissionless blockchain systems in tokenized markets aligns with existing investor protection goals and enhances ownership rights.
Advocacy for retail investor access
The company advised the SEC to focus regulatory efforts on steps that WOULD allow access to tokenized securities products by retail investors, particularly those represented via DTC.
Ondo Finance has been active in tokenizing traditional financial instruments, especially the short-term U.S. government securities. This filing is part of a wider effort to work closely with U.S. financial regulators. The company has previously engaged with the SEC’s staff in April 2025 to discuss structured pathways for compliant issuance and distribution of tokenized securities.
Addressing regulatory ambiguity
Currently, the ambiguity in U.S. regulation over digital asset securities has kept the issuance and sale of tokenized treasuries largely within the purview of accredited investors or extra-United States jurisdictions.
Ondo is seeking to address the regulatory uncertainty head-on with a well-defined regulatory road map. This approach aims to set standards for market infrastructure, disclosure, and compliance to ensure technological adoption does not undermine investor protections.
Potential impact on RWA tokenization market
The guidance by the SEC on this could set a meaningful precedent for the RWA tokenization market. If the Commission decides to follow a path similar to what Ondo has suggested, it could lead to democratizing investment, as it would allow compliant tokenized products to be offered to retail investors, effectively narrowing the gap between traditional and decentralized finance.
Permissionless blockchain acceptance of these securities would prove a model for 24/7/365 global liquidity and faster settlement that could better optimize the efficiency of capital markets.
Such a MOVE would clarify rules of engagement for the thousands of financial technology companies and potentially place the U.S. in a leading position to shape global standards for the fast-emerging world of tokenized finance. A failure to establish clear rules or a decision to enforce legacy regulations rigidly could stifle innovation, driving the development of this market to more receptive jurisdictions overseas.
Ondo Finance’s roadmap represents a major attempt to spur regulatory clarity for digital asset securities. By arguing that tokenized products, even those backed by U.S. Treasuries, can live within the confines of existing rules, and by arguing for permissioned and permissionless technology inclusion, the firm is asking the SEC to clear the path forward.
Also Read: Ondo Gets EU Approval to Offer Tokenized Stocks and ETFs
