SEC and Ondo Finance Discuss Regulatory Framework for Tokenized US Securities

Ondo Finance recently met with the U.S. SEC’s Crypto Asset Working Group to propose a regulatory framework for tokenizing publicly traded U.S. securities. The meeting, which involved legal experts from Davis Polk & Wardwell, focused on identifying how current financial regulations could be applied to blockchain-based, wrapped securities. Ondo Finance (ONDO) presented its proposed structure for tokenized securities, outlining key issues including registration, broker-dealer compliance, market regulation, and adherence to state corporate law. The firm also explored potential sandbox arrangements or relief measures aimed at fostering innovation while ensuring investor protection. Senior figures in the company, including CEO Nathan Allman and Chief Strategy Officer Ian De Bode, participated in the discussions, advocating for a compliant pathway that integrates digital representations of traditional assets within the existing U.S. regulatory framework. The proposal seeks to address long-standing legal uncertainties that have affected crypto-asset issuers, potentially paving the way for more structured and legally compliant tokenization models.