SEC Ends Two-Year Investigation Into Ondo, Paving Way for U.S. Expansion in Tokenized Assets
Ondo received formal notice last month that the two-year SEC probe had ended
Welcome to the Monday edition of the Crypto In America newsletter!
What you’ll read: SEC closes investigation into Ondo Finance, and what we’re watching this week.
The Securities and Exchange Commission has closed its investigation into tokenization firm Ondo Finance without recommending any charges, Crypto In America has learned.
The probe, which began in October 2023 under former SEC Chair Gary Gensler, examined whether Ondo complied with U.S. securities laws when tokenizing U.S. Treasury products and whether ONDO tokens should be classified as securities.
According to an Ondo spokesperson, the firm received formal notice in late November that the two-year SEC probe had ended, marking another reversal of a Biden-era regulatory action against a digital asset company. Since pro-crypto SEC Chairman Paul Atkins took the helm, the agency has closed most crypto-related investigations and rolled back several high-profile cases, including those involving Coinbase, Ripple, and Kraken.
The move comes as equity tokenization is becoming not just a hot topic in traditional finance, but a growing priority for the SEC. Last week, the regulator held a panel at its Investor Advisory Committee meeting to discuss how tokenization could improve the issuance, trading, and settlement of public equities while maintaining investor protections.
“Distributed ledger technology and the tokenization of financial assets, including securities, have the potential to transform our capital markets,” Chair Atkins said in prepared remarks at the meeting.
Ondo says the resolution of the investigation clears the way for it to expand U.S. operations, following its registration as an investment advisor and the acquisition of Oasis Pro Markets, an SEC-registered broker-dealer, ATS operator, and transfer agent. The company is set to host its annual Ondo Summit in New York on February 3, where it’s expected to reveal new tools and products for tokenizing real-world assets.
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👀 What To Watch This Week
Market Structure: We’re heading into the second-to-last week before Congress breaks for the holidays, which means Banking Committee senators and staff are finalizing their market structure bill ahead of a possible markup next week, though no date has been confirmed. A bipartisan member meeting on Thursday was described as positive, and discussions are expected to continue this week to resolve lingering qualms over ethics and token classification. Senate Ag has also yet to schedule its own markup.
A New Era for Spot Trading: Derivatives exchange Bitnomial is set to launch spot crypto trading this week, becoming the first CFTC-regulated entity in the U.S. to do so. CEO Luke Hoersten says the move means leveraged spot crypto trading will now be available under the same regulatory framework that governs U.S. perpetuals, futures, and options.
Here’s what else we’re tracking this week:
Monday
9:00 AM: The Blockchain Association Policy Summit kicks off in Washington today, featuring speakers from across the crypto regulatory spectrum, including Senate Majority Leader John Thune (R-SD), Comptroller of the Currency Jonathan Gould, SEC Commissioner Hester Peirce, and Sen. Bernie Moreno (R-OH). Later this evening, Commerce Secretary Howard Lutnick and White House Crypto Council Executive Director Patrick Witt will address attendees at a gala.
Tuesday
9:00 AM: The BA Policy Summit continues with speakers including several members of Congress, U.S. Treasury officials and SEC Chairman Paul Atkins.
View the agenda for both days here.
9:30 AM: Bitcoin treasury firm Twenty One Capital begins trading on NYSE under ticker XXI following a business combination with Cantor Equity Partners.
Wednesday
2:00 PM: The Federal Open Markets Committee (FOMC) announces its next interest rate decision and Chair Powell gives a speech to the press at 2:30 PM. According to CME’s Fedwatch tool, the central bank is likely to reduce the target rate by 25 basis points to 3.50% to 3.75%.
Thursday
Do Kwon, founder of Terraform Labs, is set to be sentenced in a Manhattan federal court after pleading guilty in August to conspiracy and wire fraud charges for defrauding investors. Prosecutors have recommended a 12-year sentence for his role in the collapse of the UST algorithmic stablecoin and the associated LUNA token, which helped trigger the 2022 “crypto winter,” while his defense team is asking for five years.
Solana’s flagship conference, Breakpoint, kicks off in Abu Dhabi. Crypto In America’s Jacquelyn Melinek will be reporting from the ground.
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