Crypto News: Ondo Finance Calls for More Transparency Before Nasdaq Tokenization

Ondo Finance urges SEC to delay Nasdaq’s tokenized securities plan, citing lack of transparency in settlement details and investor fairness.

Ondo Finance has urged the U.S. Securities and Exchange Commission (SEC) to hold off on approving Nasdaq’s proposal to trade tokenized securities. 

The blockchain company argues that the plan lacks transparency regarding settlement details and could favor larger, established players in the market. Ondo’s concerns center around how the Depository Trust Company (DTC) will handle blockchain settlements, which is critical to the proposal’s success.

Ondo Finance’s Concerns Over Nasdaq’s Proposal

Ondo Finance expressed its concerns in a letter to the SEC. The company believes that Nasdaq’s proposal to trade tokenized securities cannot be fully evaluated without detailed information on the DTC’s settlement processes. 

DTC is a key player in post-trade settlements for U.S. securities. Ondo argues that without clarity on how DTC will operate, investors and regulators cannot properly assess the proposal.

While Ondo supports the move toward tokenization, it emphasized that the lack of public information could result in an unfair advantage for large, established players. 

The company is calling for open collaboration and transparent standards before proceeding with the rule change.

Call for Transparency in Tokenization Process

Ondo Finance specifically emphasized the need for full transparency in Nasdaq’s tokenized securities plan. The company highlighted that without clear public details on how blockchain settlements will be processed, investors and regulators cannot adequately evaluate the fairness of the proposal. 

“The lack of transparency may favor well-established players who have access to non-public information, which could create an uneven playing field,” Ondo stated in its letter to the SEC.

The company urged the SEC to delay Nasdaq’s proposal until all aspects of DTC’s blockchain settlement system are fully disclosed. By prioritizing transparency, Ondo believes the SEC can help ensure that tokenization benefits all market participants and fosters fair competition. 

With tokenization seen as a key innovation in finance, the company stressed the importance of building a trustworthy foundation for future adoption.

The Broader Push for Tokenization

Nasdaq’s proposal comes amid growing interest in tokenized assets. Several platforms have already launched or announced plans for tokenized stocks and ETFs. 

These digital versions of traditional securities are seen as a way to increase market access and liquidity, while also providing new investment opportunities.

Ondo Finance, which focuses on tokenized versions of real-world assets, has been actively involved in pushing for greater transparency in this space. The company manages tokenized versions of U.S. government securities and other assets. Moreover, it aims to bring more traditional financial products onto the blockchain. 

As the debate over tokenized securities continues, the SEC faces pressure from various industry players to ensure that the process is fair and transparent.

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