Ondo Finance, a major player in the tokenized asset market, has urged the U.S. Securities and Exchange Commission (SEC) to delay approval of Nasdaq’s plan to launch a tokenized securities platform, citing regulatory, technical, and market structure concerns. The request highlights growing tensions between traditional financial institutions and crypto-native firms over how digital assets should be regulated and integrated into existing markets.
Concerns over market readiness
In a formal letter to the SEC, Ondo Finance said Nasdaq’s proposed platform for trading tokenized securities may be moving too quickly without sufficient safeguards. The company argued that more time is needed to ensure proper investor protection, clear regulatory frameworks, and technical standards before allowing such products to go live.
“Tokenized securities can transform financial markets, but launching at scale without the right protections could create unnecessary risks,” Ondo Finance said in its statement. The firm added that regulators should not rush approval without considering how these products will interact with existing rules and market infrastructure.
What Nasdaq is proposing
Nasdaq’s plan involves launching a regulated marketplace for tokenized versions of traditional financial assets such as stocks, bonds, and funds. These tokens would represent ownership in real-world securities but would trade on blockchain-based platforms, potentially increasing market efficiency and transparency.
The proposal has been seen as a major step toward bringing tokenization into mainstream finance, with Nasdaq aiming to become one of the first major exchanges in the U.S. to offer such services.
Ondo Finance urges stronger oversight
Ondo Finance emphasized that the tokenization of securities is complex, involving legal, operational, and technical challenges. It warned that approving such a platform without first addressing key concerns could lead to confusion among investors, uneven market access, or compliance risks.
“Clear regulatory guidance is essential,” the company said. “Tokenized assets must operate under the same investor protection principles as traditional securities. Without that clarity, the market may face instability.”
Ondo also argued that smaller fintech and blockchain firms could be at a disadvantage if large institutions like Nasdaq dominate the space before clear rules are established.
Broader debate on tokenization
The SEC has been facing increasing pressure to define its approach to tokenized assets as more traditional institutions explore blockchain-based trading. Supporters of tokenization argue that it can improve liquidity, reduce settlement times, and increase transparency in financial markets.
However, critics say the technology is still developing and may pose risks if deployed too quickly, especially without harmonized rules across jurisdictions.
A cautious regulatory environment
Regulators in the U.S. have taken a cautious approach toward crypto and digital assets, often emphasizing investor protection and market integrity. Ondo’s letter reflects the concerns of many in the digital asset industry who want a level playing field and clear guidance before major players move forward.
What comes next
The SEC is currently reviewing Nasdaq’s proposal and may consider feedback from market participants, including Ondo Finance, before making a decision. Analysts expect the review process to take several months.
If approved, Nasdaq’s tokenized securities platform could mark a turning point for the U.S. financial sector. If delayed, it could give regulators and industry players more time to build stronger frameworks.
Either way, Ondo Finance’s intervention underscores the growing importance of tokenization and the debate over how fast the traditional financial system should adopt blockchain-based solutions.
