Ondo Finance, a blockchain firm specializing in tokenized real-world assets, has called on the U.S. Securities and Exchange Commission (SEC) to delay or reject Nasdaq's proposal to trade tokenized securities, arguing it lacks transparency and could grant established market players an unfair advantage. In a letter dated October 17, 2025, Ondo emphasized that regulators and investors cannot fairly assess the plan without public details on how the Depository Trust Company (DTC) will manage blockchain settlements, as the DTC serves as the primary depository for U.S. securities and handles post-trade settlement.
While expressing support for tokenization efforts, Ondo warned that Nasdaq's reliance on non-public information creates differential access, limiting other firms' ability to provide input. The company also highlighted that Nasdaq's rule cannot take effect until the DTC finalizes its system, suggesting no harm in postponing approval until more features are disclosed. Ondo urged the SEC to prioritize open collaboration and transparent standards before making a final decision.
Nasdaq filed its proposal with the SEC on September 8, 2025, seeking to amend rules to allow trading of tokenized shares—digital versions of traditional stocks recorded on a blockchain. The proposal was published in the Federal Register on September 22, triggering a 45-day review period that ends in early November or late December if extended. If approved, tokenized shares would trade alongside traditional ones, with settlements processed through the DTC's upcoming system.
This regulatory debate unfolds as several platforms advance tokenization. On June 30, Robinhood launched a layer-2 blockchain to support trading tokenized U.S. stocks and ETFs for European users, with plans to list over 200 equities. eToro announced intentions to launch tokenized stocks as ERC-20 tokens on Ethereum, covering 100 popular U.S.-listed stocks and ETFs available for near-24/5 trading. Kraken introduced a tokenized securities platform in September for eligible European customers. Galaxy Digital cautioned in July that this trend could challenge the New York Stock Exchange's dominance by impacting traditional market liquidity.
SEC Commissioner Hester Peirce has labeled tokenization a high priority, but concerns persist. Benjamin Schiffrin of Better Markets warned that prioritizing innovation over regulation could jeopardize investor safety, stating, It's not clear that investors need tokenized securities. The SEC's job is to protect them, not to do what the crypto industry wants.
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