The DeFi firm warns that key details about tokenized settlement remain undisclosed, raising questions about market fairness.
Ondo Finance has published an open letter to the U.S. Securities and Exchange Commission (SEC) asking it to delay approval of Nasdaq’s plan to trade tokenized securities until more details are revealed.
The team behind the decentralized finance protocol, which has $1.7 billion in total value locked (TVL), said Nasdaq’s proposal depends on the Depository Trust Company (DTC) figuring out a new system for tokenized settlement – information that has not yet been made public.
If approved, Nasdaq’s proposal (filed on Sept. 8) would mark the first time tokenized securities are listed on a major U.S. exchange. However, Ondo warned that moving forward without transparency could give larger financial institutions an unfair edge or make it harder for newer firms to compete.
“New market rules must be built on clear, public information available to all market participants to use when providing comments,” the letter reads. “Without more information about how the Depository Trust Company (DTC) will handle tokenized settlement, neither regulators, market participants, nor investors can properly assess how this proposal would function.”
Tokenization, or turning stocks, bonds, and investment funds into digital assets, is growing quickly, with the real-world asset (RWA) sector recently topping $34 billion in on-chain value, a 10% increase in the past month, per RWAxyz.
The dispute highlights the challenge of adapting traditional financial (TradFi) systems to expanding blockchain markets. Ondo’s letter also emphasizes the need for clearer rules as Wall Street and crypto firms work to bring traditional assets on-chain.
“Raising the Right Flag”
Ondo is “raising the right flag,” Maja Vujinovic, CEO and co-founder of Digital Assets at FG Nexus, told The Defiant. She said tokenization cannot scale if the “post-trade plumbing stays opaque.”
“The DTC is effectively the switchboard of U.S. capital markets, and everyone deserves to know how it plans to connect to blockchain rails,” Vujinovic said. “If DTC’s model ends up permissioned or closed, tokenization will just replicate Wall Street’s silos on-chain.”
She added that real innovation requires transparent and interoperable settlement layers.
“This moment isn’t about delaying tokenization – it’s about doing it right,” Vujinovic explained. “The question is whether the U.S. builds an open architecture or lets one clearing agency dictate the rules of the future financial internet.”
Others Disagree
However, Eli Cohen, General Counsel at Centrifuge and Chief Compliance Officer at Anemoy, offered a different perspective.
“I fear that this may be viewed as Ondo trying to maintain their existing OGM franchise for as long as possible without competition from Nasdaq,” Cohen said. OGM, or Ondo Global Markets, is a platform Ondo launched in February 2025 that aims to provide on-chain access to traditional assets like stocks, bonds, and exchange-traded funds (ETFs).
At the same time, Cohen acknowledged that “much more transparency” is needed from the DTC to make the Nasdaq proposal feasible. Cohen cautioned, however, that regulatory delays are rarely in the best interest of crypto markets.
“A delay could well mean that no approval is ever granted, given the current political uncertainties,” he said. “A failure to approve a major tokenization effort would be seen as a big setback for everyone in the space. So I do not agree that their industry objections to the SEC are helpful or productive.”
The letter comes a few weeks after Ondo rolled out a new platform that allows non-U.S. investors to access over 100 tokenized U.S. stocks and ETFs on Ethereum.
Earlier this year, Ondo also deployed its flagship product, Ondo Short-Term U.S. Government Treasuries (OUSG), on the XRP Ledger (XRPL). The move aimed to bring OUSG to XRPL’s institutional user base.
