Ondo challenges Nasdaq tokenization plan, cites settlement risk
-oLJr5Aox.png "Ondo challenges Nasdaq tokenization plan, cites settlement risk")
Ondo Finance submitted a letter to the U.S. Securities and Exchange Commission (SEC) urging regulators to pause review of Nasdaq’s proposal to trade tokenized securities until details about post-trade settlement are publicly disclosed.
Ondo argued that settlement mechanics via the Depository Trust Company (DTC) remain undisclosed, and that such opacity could give established market participants an edge over smaller or newer firms.
The company framed the request as a need for clearer, open standards, saying that “new market rules must be built on clear, public information.” It noted that without public information on how the DTC would handle blockchain-based settlement, neither regulators, market participants nor investors could fully assess the proposal.
Nasdaq filed its proposal on September 8, 2025, and the rulemaking was published on September 22, triggering a 45-day review window by the SEC, which could be extended. The rule would allow trading of tokenized shares (digital representations of traditional stocks) via blockchain settlement.
The company framed the request as a need for clearer, open standards, saying that “new market rules must be built on clear, public information.” It noted that without public information on how the DTC would handle blockchain-based settlement, neither regulators, market participants nor investors could fully assess the proposal.
Nasdaq filed its proposal on September 8, 2025, and the rulemaking was published on September 22, triggering a 45-day review window by the SEC, which could be extended. The rule would allow trading of tokenized shares (digital representations of traditional stocks) via blockchain settlement.
The debate is taking place amid growing scrutiny of tokenized securities from regulators and industry observers. Some parties have raised concerns that tokenized stocks might lack core rights like voting or dividends, and that tokenization could fragment liquidity or circumvent existing oversight.
Ondo, which operates its own tokenization platform, noted in its letter that it supports tokenization, but only if settlement infrastructure is open and transparent. It signaled willingness to revisit the proposal if more technical and operational details from the DTC are published.
The SEC must now decide whether to extend its review period or demand additional disclosures from Nasdaq and the DTC before approving the change. The outcome could set a precedent for future tokenization efforts by major exchanges and digital-asset firms.
Ondo, which operates its own tokenization platform, noted in its letter that it supports tokenization, but only if settlement infrastructure is open and transparent. It signaled willingness to revisit the proposal if more technical and operational details from the DTC are published.
The SEC must now decide whether to extend its review period or demand additional disclosures from Nasdaq and the DTC before approving the change. The outcome could set a precedent for future tokenization efforts by major exchanges and digital-asset firms.
Author
Sebile Fane cut her teeth in blockchain by building tiny NFT experiments with friends in her living room, long before the buzzwords took hold. She’s driven by a curiosity for the human stories behind smart contracts — whether it’s a small-town artist minting her first token or a DAO voting on climate grants — and weaves technical insight with genuine empathy.
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