Ondo Finance Calls for Transparency Before Market Transition
The debate around tokenized securities is heating up as regulators face growing pressure to slow down approval of Nasdaq’s digital asset trading proposal. Financial technology firm Ondo Finance has publicly urged the U.S. Securities and Exchange Commission (SEC) to withhold approval until more transparency is provided by the Depository Trust Company (DTC) — the clearinghouse expected to handle settlement for tokenized assets.
In a detailed statement, Ondo warned that the proposal lacks essential details about how DTC plans to manage blockchain-based settlements, raising serious questions about market fairness and compliance. The company argued that the information gap could distort competition, giving privileged access to established institutions while limiting smaller innovators.
“Regulatory progress must be built on transparency,” the statement noted. “Without clear public disclosure of DTC’s framework, neither investors nor policymakers can accurately judge the risks of tokenized markets.”
Analysts say the conflict highlights a broader challenge for regulators: balancing innovation with investor protection. Dr. Lila Morgan, a blockchain policy researcher, explained that tokenization could modernize capital markets, but only if the underlying infrastructure is open and equally accessible.
“Without visibility into DTC’s systems, smaller firms face higher barriers to entry,” she said. “That undermines the principle of fair competition in digital finance.”
Ondo’s letter also pointed to Section 6(b)(8) of the Securities Exchange Act, which requires exchanges to avoid unfair discrimination. The firm argued that approving Nasdaq’s plan prematurely could “discourage innovation by creating unequal access to critical data.”
The firm’s position does not oppose tokenization itself. Instead, it emphasizes that public disclosure must precede implementation to maintain market integrity and investor trust.
“Tokenization can bridge traditional and decentralized finance,” the letter concluded, “but only if transparency remains the cornerstone of progress.”
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