On 15 October 2025, Ondo Finance urged the U.S. Securities and Exchange Commission (SEC) to delay Nasdaq‘s plan to trade tokenised versions of traditional securities, citing a lack of transparency from the Depository Trust Company (DTC).
Nasdaq Tokenised Securities and the Transparency Debate
The crux of the dispute is not tokenisation itself but the control of the settlement infrastructure. Nasdaq’s proposal involves listing and trading tokenised securities with settlements managed by DTC, a longstanding clearinghouse. However, DTC has yet to disclose how tokenised settlements would function, raising concerns about operational opacity.
Ondo Finance’s open letter, “A Call for Transparency,” argues that this lack of clarity prevents regulators and market participants from assessing the risks involved. The letter suggests that DTC may have shared operational details with certain financial institutions, creating a two-tier information system that could violate Section 6(b)(8) of the Securities Exchange Act of 1934, which prohibits anti-competitive practices.
The Stakes of Tokenised Securities
DTC’s parent company, DTCC, processes over $2 quadrillion in securities annually, making its role in the tokenisation process pivotal. Ondo Finance warns that Nasdaq’s reliance on DTC’s Project Ion, a private distributed ledger technology, could entrench existing financial hierarchies rather than democratise market access.
The SEC faces a regulatory paradox: approving an opaque system to enhance market transparency. Ondo’s intervention forces the SEC to confront whether fairness requires not just transparent outcomes but transparent processes.
Institutional vs. Public-Chain Tokenisation
The debate highlights a growing divide between institutional tokenisation, which uses blockchain for backend efficiency, and public-chain tokenisation, which embraces blockchain’s open and composable nature. Ondo’s stance underscores the ideological clash between these models.
Market Power and the Future of Wall Street
Whoever controls tokenised settlement standards will shape Wall Street’s next generation infrastructure. If DTC’s model prevails, it may sideline public networks, transforming tokenisation into a mere optimisation tool for incumbents.
Regulatory Fairness and Market Innovation
Ondo’s letter challenges the SEC to ensure that foundational market data is publicly accessible, promoting innovation and fair competition. The firm argues that without transparency, smaller firms face higher costs and barriers, stifling innovation in blockchain-based securities markets.
*This article does not constitute financial advice.*
