SEC Engages Ondo Finance in Talks Over Wrapped Securities and Crypto Compliance

The U.S. Securities and Exchange Commission (SEC) continues to explore potential regulatory pathways for digital assets

The U.S. Securities and Exchange Commission (SEC) is actively engaging with crypto firms and legal counsel to navigate the emerging landscape of digital assets, as evidenced by a recent meeting with Ondo Finance and Davis Polk & Wardwell.

The meeting, disclosed by the SEC on April 24, focused on the issuance and sale of tokenized versions of publicly traded U.S. securities, an area of increasing interest and discussion within the crypto industry.

The agency’s crypto-focused task force, led by Commissioner Hester Peirce, has been examining potential regulatory pathways, and the meeting with Ondo Finance appears to be part of this ongoing effort.

Ondo Finance, a company known for developing tokenized financial instruments and making a $1 million donation to former President Donald Trump’s inauguration fund, reportedly sought to discuss SEC registration obligations, compliance best practices, and the feasibility of launching a regulatory sandbox.

A sandbox would provide a temporary, flexible environment for firms like Ondo Finance to experiment with new financial products and technologies in a controlled setting, reducing the risk of material violations during development.

The meeting also included the presence of Davis Polk, a law firm that recently announced its role in advising Trump’s media platform, Truth Social, on launching crypto-linked exchange-traded funds.

The SEC’s engagement with Ondo Finance follows a period of heightened scrutiny on crypto firms, leading to several lawsuits, including one against Dragonchain, which was later dropped by the agency.

Earlier this year, the SEC unveiled a joint statement with other financial regulators, expressing concerns over the potential destabilization of EU financial stability by macroeconomic policies, in apparent response to Trump’s calls for Bitcoin to be used as a global reserve currency.

In a separate development, Binance has announced stricter compliance measures for South African users, following a warning from the country’s financial regulator.