- SEC met Ondo Finance and Davis Polk to discuss legal paths for tokenized U.S. securities.
- Ondo proposed sandbox models to foster compliant innovation in asset tokenization.
- SEC will hold a crypto custody roundtable on April 25 featuring major industry players.
The US Securities and Exchange Commission (SEC) has met with crypto firm Ondo Finance and legal firm Davis Polk and Wardwell to discuss the regulatory path for tokenized securities. The meeting held on April 24 was dedicated to the topic of tokenization of U.S. publicly traded assets using blockchain networks.
During the session, Ondo presented a compliant model for issuing tokenized assets according to the U.S. legislation. Some of the areas of concern that the firm addressed included securities registration, obligations of the broker-dealer and state corporate laws. Davis Polk lawyers backed the position of the firm and gave their opinion on possible legal implications.
Ondo Finance, which had previously contributed $1 million to Donald Trump’s inauguration fund, described several approaches to how tokenization might operate under existing regulations in the U.S. These approaches were intended to address longstanding uncertainties and facilitate easier entrance to the market for asset tokenization platforms.
Push for Regulatory Sandboxes to Boost Innovation
Ondo’s executives, including CEO Nathan Allman and chief strategy officer Ian De Bode, led the proposal. They underlined the creation of a secure and compliant framework for tokenized financial products. Their presentation also highlighted the need to implement a regulatory sandbox, which would address innovation in the trade while ensuring investors’ protection.
The meeting was another sign of the increased interaction between the SEC and the industry after the appointment of Paul Atkins as the agency chair. Atkins, who was appointed by President Trump, took up the position on the 21st of April. Since his appointment the SEC has paused several investigations, such as those involving Crypto.com, Immutable, and Kraken.
As much as Atkins has not released a formal crypto agenda, the SEC task force spearheaded by the commissioner of Hester M. Peirce has been actively engaging with stakeholders in the industry. The meeting also discussed whether tokenized securities can be considered as derivatives under U.S. laws.
SEC Plans Public Roundtable on Crypto Custody
In another bid to expand its reach, the SEC has planned a Crypto Task Force Roundtable for April 25 in Washington, D.C. The event will comprise two-panel discussions. One will cover custody in relation to broker-dealers while the other address the custody in relation to investment advisers and registered investment companies.
The participants will comprise executives from companies like Fireblocks, Anchance Digital, Kraken, and BitGo. Moreover, legal and academic specialists from Georgetown University and the University of Pennsylvania are also expected to attend.
The roundtable is intended to focus on the recent practices and compliance challenges regarding digital asset custody, especially following the introduction of crypto exchange-traded funds in 2024. These developments have led to pressure on institutions to seek regulated crypto custody services.
The meeting between Ondo and Davis Polk marks a new phase in the commission’s structure toward engaging with crypto assets. The agency’s willingness to consider innovation frameworks like sandboxes could open the door for broader industry participation.
