Digital asset firm Ondo Finance submitted a no-action letter request to the SEC's Division of Trading and Markets on April 13, tied to its Ondo Global Markets (OGM) product. The firm seeks assurance that its Ethereum-based model for recording and administering certain securities entitlements would not trigger enforcement action. The proposal uses blockchain to mirror ownership claims alongside existing legal, custody, and recordkeeping frameworks.
Positioning the request as a limited operational step, Ondo stressed the model does not change how products are structured. “We think this structure can make OGM products more useful without changing the basic legal framework that supports them,” the company stated. The filing clarified: “It does not ask the SEC to rewrite securities law or approve every form of tokenized security. It asks for confirmation that SEC staff would not recommend enforcement action if we proceed with a specific model for recording and administering certain securities entitlements in tokenized form on Ethereum Mainnet in support of OGM products.” The request noted OGM products remain tokenized notes offering non-U.S. investors exposure to U.S.-listed stocks and ETFs.
Three-Layer Framework Connects Ethereum With Custody Systems
The filing describes three distinct layers. First, the offshore layer includes OGM products — tokenized notes sold outside the U.S. Second, the collateral layer comprises U.S.-listed stocks and ETFs held through the Depository Trust Company and recorded by Alpaca Securities. Third, the recordkeeping and control layer uses Ethereum Mainnet to support reconciliation and administration of securities entitlements tied to that collateral. Ondo explained: “What changes is that, in a limited set of circumstances, the relevant securities entitlements would also be represented in tokenized form on Ethereum Mainnet and held by our custodian Bitgo to support recordkeeping and operational processes.” This separation ensures blockchain mirrors ownership without replacing the legal record.
Broader implications center on whether public blockchain infrastructure can operate within regulated markets under existing rules. The company stated: “An SEC staff no-action position does not create a new rule. What it can do is create room for a specific, bounded model to move forward without waiting for a longer rulemaking process.” If accepted, the approach could support blockchain-based systems running alongside traditional financial infrastructure while maintaining compliance. Meanwhile, U.S. regulators including the SEC and CFTC are accelerating crypto oversight using interpretive rules to bypass lengthy rulemaking.