Ondo Finance Urges SEC to Delay Nasdaq's Tokenization Plan Over Transparency Gaps

Ondo Finance has asked the U.S. Securities and Exchange Commission (SEC) to postpone a proposed rule change from Nasdaq that would allow for the trading of tokenized securities. The firm raised concerns regarding a lack of transparency surrounding the operations of the Depository Trust Company (DTC), which is expected to handle the post-trade settlement for these tokenized assets. Ondo emphasized that Nasdaq's understanding of DTC's process remains vague and lacks direct evidence, undermining the SEC's ability to evaluate the rule change's compliance with the Securities Exchange Act of 1934. The company argued that this information asymmetry favors larger firms and marginalizes smaller or newer companies that lack the needed data to adapt to market conditions. Ondo suggests that greater transparency from DTC could alleviate these concerns, and until then, they are advocating for a formal SEC review of Nasdaq's proposal to potentially prevent its approval.

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