Ondo Finance urged the US Securities and Trade Fee (SEC) to delay or reject Nasdaq’s proposal to commerce tokenized securities, saying it lacks transparency and will give established market gamers an unfair edge.
In a Wednesday letter to the regulator, Ondo — a blockchain firm that points tokenized variations of conventional belongings — mentioned regulators and buyers can’t pretty consider Nasdaq’s proposal with out public particulars on how the Depository Belief Firm (DTC) will deal with blockchain settlements. DTC serves as the primary depository for US securities and facilitates their post-trade settlement.
Whereas acknowledging assist of Nasdaq’s transfer towards tokenization, Ondo warned that “Nasdaq’s reference to personal data implies differential entry that deprives different companies of a good alternative to remark.”
The corporate additionally famous that Nasdaq’s rule can not take impact till DTC finalizes its system, saying there’s no hurt in delaying approval till extra options are launched. It known as on the SEC to prioritize “open collaboration and clear requirements” earlier than making a ultimate determination.
Ondo’s letter responds to Nasdaq’s Sept. 8 filing with the SEC, by which the world’s second-largest inventory alternate sought to amend its guidelines to permit trading in tokenized securities.
Tokenized shares are digital variations of conventional shares recorded on a blockchain.
If accredited, the proposal would let tokenized shares commerce alongside conventional ones, with settlements processed by way of the DTC’s forthcoming system for tokenized securities.
Nasdaq’s proposal was published within the Federal Register on Sept. 22, beginning the SEC’s 45-day evaluation interval, which runs till early November or late December if prolonged.
Associated: $250M Ondo Catalyst fund signals ‘arms race’ for RWA tokenization
The push for tokenized shares
The continuing debate concerning the tokenization of Nasdaq shares is going on whereas a number of platforms have already listed or are planning to listing tokenized variations of US equities.
On June 30, Robinhood launched a layer-2 blockchain to assist buying and selling tokenized US stocks and ETFs for European customers. The platform mentioned it might listing over 200 US equities and funds as onchain tokens.
Buying and selling platform eToro additionally introduced plans to launch tokenized stocks as ERC-20 tokens on Ethereum. The corporate mentioned the rollout will embrace 100 well-liked US-listed shares and ETFs, accessible to commerce 24/5.
Kraken can be following the development. The crypto alternate launched a tokenized securities platform in September, making tokenized shares accessible to eligible prospects in Europe.
Galaxy Digital warned that the continued tokenization push may threaten the New York Stock Exchange’s dominance, saying in July that it challenges the liquidity of conventional markets.
Journal: Robinhood’s tokenized stocks have stirred up a legal hornet’s nest
