Ondo Finance's native ONDO token jumped Thursday after the U.S. Securities and Exchange Commission introduced a new framework that could make it easier for regulated platforms to bring tokeni
Ondo Finance's native ONDO token jumped Thursday after the U.S. Securities and Exchange Commission introduced a new framework that could make it easier for regulated platforms to bring tokenized stocks onto blockchain networks.
ONDO was trading at around $0.3703, up 13.6% over 24 hours, according to the market data shown at the time of writing.
Source: CoingeckoThe move came after the SEC issued its long-awaited 'Innovation Exemption,' granting temporary, conditional relief to Tokenized Securities Venues, or TSVs, that want to facilitate trading in tokenized National Market System stocks.
The exemption allows qualifying venues to operate without being treated as traditional exchanges under certain conditions. It also provides conditional relief for certain liquidity providers operating automated market maker pools.
For Ondo, the development lands directly in the market it has been building around tokenized securities.
Related: Ondo takes tokenized assets to Australia in new market push
Ondo Finance operates Ondo Stocks, a platform focused on tokenized stocks and exchange-traded funds. The company has been building infrastructure that connects blockchain-based assets with traditional financial markets.
The platform allows eligible investors outside the U.S. to gain exposure to hundreds of U.S. stocks and ETFs through blockchain-based tokens. Ondo says its tokenized securities are backed by the corresponding underlying securities and cash in transit, with assets held through U.S.-registered broker-dealers or U.S.-chartered trust companies.
Ondo's broker-dealer subsidiary, Oasis Pro Markets, has also received FINRA authorizations covering tokenized equities and funds for U.S. investors, including secondary trading and settlement using fiat currencies or supported stablecoins.
The company has also expanded its tokenized stock products across Ethereum, BNB Chain and Solana, while enabling trading through various wallets, exchanges and DeFi applications.
That makes the SEC's latest action particularly relevant.
The regulator said its 'Innovation Exemption' will allow eligible TSVs to use permissioned automated market makers and liquidity pools to facilitate secondary trading of tokenized NMS stocks.
The relief is temporary and will expire five years after publication. It also comes with several conditions, including limits on the number of stocks and trading volume, requirements around shareholder rights and public disclosures, and rules requiring tokenized stocks to stop trading when the underlying stock is halted on its primary exchange.
Peter Curley, head of global regulatory affairs at Ondo Finance, told TheStreet Roundtable that the SEC's action demonstrated that the agency could advance tokenization using its existing authority.
“Two days after the CLARITY Act failed in the Senate, the SEC issued its Innovation Exemption on its own authority. Chair Atkins called it a step forward ‘within its statutory authority.’ That's the proof point we've pointed to all along: the SEC didn't need new legislation, and it just showed it.”
Curley said Ondo views the exemption as a step toward permanent rules and intends to participate in the SEC's continuing discussion around tokenized securities.
The SEC is now seeking public comments on the exemption and potential next steps.
For Ondo, the announcement provides another regulatory building block for its effort to bring stocks and other traditional assets onto blockchain infrastructure.
Related: HIVE's BUZZ HPC appoints 50-year capital markets veteran to its board
