- The SEC has finally concluded its probe into Ondo Finance without recommending any enforcement actions, a year after launching the inquiry.
Ondo Finance was one of the pioneers of real-world asset (RWA) tokenization. However, its rapid growth came at a time when the US regulatory environment was marred with unclear rules, and the US Securities and Exchange Commission (SEC) employed a “regulation by enforcement” approach. As a result, the company eventually came under the regulator’s crosshairs.
The Ondo Finance Probe
The SEC, influenced by the Biden administration’s antagonistic stance toward crypto-related businesses and by Chairman Gary Gensler’s crusade against digital assets, began an inquiry into Ondo in 2024. The move was part of the agency’s probe to determine whether the platform’s RWA tokenization activities fell within US securities laws and whether the ONDO token was a security.
Ondo cooperated despite the SEC pushing it against the proverbial wall. Additionally, it insisted that its platform didn’t violate federal laws.
The company stated that, against the backdrop of the investigation, it was already operating as the first and largest tokenization platform for US Treasuries. Moreover, it was experiencing rapid global adoption and was one of the few firms focused on tokenizing publicly listed equities at scale.
Ondo stood its ground that it wasn’t “a justified target.” Then, the SEC finished its probe without taking any enforcement action.
A Shift in Regulatory Climate
The SEC’s investigation into Ondo only ended one administration later, when President Donald Trump took the country’s reins, and crypto-friendly Paul Atkins became the institution’s chairman. For Ondo, it was a significant change and further proof that the US has shifted its policy on digital assets.
The shift in the regulatory climate paves the way for tokenization to become a formal agenda item at the SEC. This is due to the agency finally recognizing how it can modernize finance, trading, and settlement of public equities. It marks a more measured approach compared to the previous regime’s enforcement-first actions.
The developments have accelerated RWA tokenization adoption. In fact, Ondo highlighted that tokenized US securities have become one of the fastest-growing on-chain asset categories, and tokenized equities are trailing closely.
To reinforce its momentum in the US market and strengthen its compliance mechanisms, Ondo acquired Oasis Pro, a US-registered multi-asset alternative trading system (ATS). Furthermore, it has shown its interest in working closely with the SEC to guarantee the USA’s continued dominance in digital finance.
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