- The SEC has lastly concluded its probe into Ondo Finance with out recommending any enforcement actions, a 12 months after launching the inquiry.
Ondo Finance was one of many pioneers of real-world asset (RWA) tokenization. Nonetheless, its speedy development got here at a time when the US regulatory surroundings was marred with unclear guidelines, and the US Securities and Alternate Fee (SEC) employed a “regulation by enforcement” strategy. Consequently, the corporate ultimately got here underneath the regulator’s crosshairs.
The Ondo Finance Probe
The SEC, influenced by the Biden administration’s antagonistic stance towards crypto-related companies and by Chairman Gary Gensler’s campaign in opposition to digital belongings, started an inquiry into Ondo in 2024. The transfer was a part of the company’s probe to find out whether or not the platform’s RWA tokenization actions fell inside US securities legal guidelines and whether or not the ONDO token was a safety.
Ondo cooperated regardless of the SEC pushing it in opposition to the proverbial wall. Moreover, it insisted that its platform didn’t violate federal legal guidelines.
The corporate said that, in opposition to the backdrop of the investigation, it was already working as the primary and largest tokenization platform for US Treasuries. Furthermore, it was experiencing speedy world adoption and was one of many few companies targeted on tokenizing publicly listed equities at scale.
Ondo stood its floor that it wasn’t “a justified goal.” Then, the SEC completed its probe with out taking any enforcement action.
A Shift in Regulatory Local weather
The SEC’s investigation into Ondo solely ended one administration later, when President Donald Trump took the nation’s reins, and crypto-friendly Paul Atkins grew to become the establishment’s chairman. For Ondo, it was a major change and additional proof that the US has shifted its coverage on digital belongings.
The shift within the regulatory local weather paves the best way for tokenization to change into a proper agenda merchandise on the SEC. That is because of the company lastly recognizing the way it can modernize finance, buying and selling, and settlement of public equities. It marks a extra measured strategy in comparison with the earlier regime’s enforcement-first actions.
The developments have accelerated RWA tokenization adoption. In actual fact, Ondo highlighted that tokenized US securities have change into one of many fastest-growing on-chain asset classes, and tokenized equities are trailing intently.
To strengthen its momentum within the US market and strengthen its compliance mechanisms, Ondo acquired Oasis Professional, a US-registered multi-asset various buying and selling system (ATS). Moreover, it has proven its curiosity in working closely with the SEC to ensure the USA’s continued dominance in digital finance.
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