Ondo Finance Faces SEC Scrutiny Over Tokenized Securities—Wall Street’s Paperwork Problem Goes Crypto

Ondo Finance—the DeFi player bridging real-world assets to blockchain—just got a ’friendly’ chat request from the SEC. Topic? How to cram tokenized U.S. securities into regulatory boxes built for fax machines.

The compliance tango: Ondo’s flagship products (think Treasury bonds on-chain) now dance perilously close to the SEC’s ’unregistered security’ red line. Gary Gensler’s team wants answers—probably in triplicate.

Why it matters: Tokenization could unlock trillions—if the suits and the coders stop talking past each other. Meanwhile, TradFi lawyers bill by the hour.

• Ondo Finance discusses tokenized U.S. securities with SEC’s crypto task force.
• ONDO token sees a 10% surge after SEC memorandum release on April 24.
• SEC and Ondo Finance explore compliance and regulatory sandbox for DeFi products.

The U.S Securities and Exchange Commission(SEC) met ONDO Finance representatives on April 24 to evaluate compliance procedures for tokenized U.S. securities. The attendees discussed how the decentralized finance (DeFi) platform could legally issue tokenized U.S. Treasuries as well as other publicly-traded assets. The dialogue is part of continuous initiatives to unite decentralized finance with traditional finance.

SEC crypto task force met w/ @OndoFinance today to discuss tokenization…

“Issuing & selling wrapped, tokenized versions of publicly traded US securities.”

*SEC* is giving this an audience.

Hope you’re paying attention. pic.twitter.com/wltCc3Pp9C

Ondo Finance, a real-world assets(RWA) tokenization platform, seeks to develop  investment products on blockchain networks. The company aims to tokenize U.S. securities such as stocks, bonds and exchange-traded funds(ETFs) in compliance with the SEC standards. The meeting was attended by SEC’s Crypto Task Force led by Hester Peirce, Ondo Finance’s CEO Nathan Allman, CSO Ian De Bode and general counsel Mark Janoff.

The discussion centered around issues such as the registration requirements, market structure regulations and financial crimes compliance related to tokenized securities. Moreover, the meeting discussed regulations in the issuance of tokenized assets and a potential regulatory sandbox to test innovative financial products. A sandbox provides a controlled environment to test new services before introduction to the market. 

SEC Meets Ondo Finance Amid Regulatory Shift

The SEC continues to collaborate with digital asset companies to explore favourable regulations in the crypto sector. Ondo Finance proposes the issuance of wrapped tokenized versions of U.S. securities which reflects the increased integration of blockchain technology with traditional finance. The platform must adhere with the SEC rules as it explores the launch of new financial products.

Moreover, Ondo Finance has discussed procedures about tokenized securities operations with the SEC. The company intends to adhere to broker-dealer requirements and state corporate laws to ensure compliance with the U.S. financial regulations. The law firm Davis Polk & Wardwell LLP which supports Ondo Finance sent representatives to participate in these discussions.

ONDO Price Action

Ondo Finance’s ONDO token experienced a 10% price increase after the SEC released the memorandum on April 24. The price of ONDO token ROSE to $1.01 but still remains more than 50% below its peak value of $2.14 in December 2024. The price movement shows increased interest in the platform and its role in the tokenization of traditional financial assets.

The meeting is part of SEC’s shift in crypto regulatory approach under the new Chairman Paul Atkins. Notably, the SEC has withdrawn various complaints such as the HEX founder Richard Heart’s case.