Ondo urges US regulators to allow stock perpetuals

Ondo Finance has asked US regulators to bring perpetual futures tied to individual stocks onshore after its offshore platform recorded $8 billion in cumulative trading volume within roughly six weeks.

Ondo Finance, in three Aug. 24 comment letters to the Securities and Exchange Commission and Commodity Futures Trading Commission, said the agencies could accommodate stock perpetual futures through the existing security futures framework.

The company’s proposal covers product classification, margin requirements and the use of onchain market data. Instead of asking Congress or federal agencies to create a separate regulatory category, Ondo wants the SEC and CFTC to apply rules already used for futures tied to individual securities.

According to its product-classification letter, the lack of a fixed expiration date does not prevent a perpetual contract from qualifying as a security futures product.

“Nothing in the statutory definition of a security futures product requires a fixed expiration date,” Ondo said.

Ondo says funding payments can replace expiration

Traditional futures expire on a set date, when the contract settles against the value of its underlying asset. Perpetual futures have no scheduled expiry and use recurring funding payments to keep their market prices close to the assets they track.

When a perpetual trades above its reference price, traders holding long positions generally pay traders holding short positions. Payments move in the opposite direction when the contract trades below the reference price, creating an incentive for both prices to converge.

Ondo told regulators that the funding mechanism performs a function similar to expiration in a dated futures contract. Under its interpretation, the economic structure of the product matters more than whether the contract ends on a predetermined date.

The filing also addresses updated margin systems and blockchain-based pricing data. Ondo argued that regulators could account for such features within current law, although the SEC and CFTC would still need to decide how individual products satisfy listing, trading, and investor-protection requirements.

A similar request reached both agencies on Aug. 24, when the Hyperliquid Policy Center proposed treating equity perpetuals with futures-like characteristics as security futures. The group said Hyperliquid’s HIP-3 markets had processed more than $480 billion in cumulative notional volume during their first 10 months.

Under that proposal, regulators would first examine how a contract is structured and traded before considering the asset it tracks. A futures-style contract tied to an individual stock would then fall under the security futures system jointly administered by the SEC and CFTC.

Security futures combine features of securities and futures law. A CFTC-regulated designated contract market can list them after notice-registering with the SEC, while a national securities exchange can use a parallel registration route with the CFTC.

Offshore stock perpetuals have processed $8B

Through a Panama-based affiliate, Ondo already offers stablecoin-settled perpetual futures referencing individual US-listed stocks to eligible users outside the United States.

The platform had generated $8 billion in cumulative trading volume by Aug. 14, according to the company’s SEC submission. Ondo said the total was reached about six weeks after the product launched.

Many referenced shares principally trade on US exchanges, even though American users cannot access the offshore contracts. The arrangement allows eligible non-US traders to gain price exposure to individual stocks while settling their positions with stablecoins instead of using a conventional brokerage account.

“Bringing that activity back to the U.S. should not be an open question; it’s something both agencies should actively pursue,” the company said.

Ondo’s request would not automatically authorize every stock perpetual. Exchanges, brokers, and clearing organizations would still need to comply with the registration, listing, margin, and customer-protection requirements that apply to security futures.

The proposal could nonetheless give US investors a regulated route to products that are already available through offshore venues. American access would depend on the agencies accepting Ondo’s classification and determining how current security futures standards apply to perpetual contracts.

Former SEC counsel Ashley Ebersole recently told crypto.news that creating a US regulatory pathway for onchain perpetuals could take 10 to 12 months if the agencies pursue rulemaking, public comments and implementation. Ebersole said the process could move faster if regulators rely heavily on existing authority or exemptions.

Ondo expands its tokenized securities business

Alongside its derivatives proposal, Ondo operates one of the largest tokenized real-world asset businesses. RWA.xyz ranked the company fourth among RWA managers, with approximately $2.6 billion in distributed asset value as of Wednesday.

Ondo Stocks listed more than 440 tokenized stocks and exchange-traded funds across Ethereum, BNB Chain and Solana as of Aug. 13. The platform reported around $1.02 billion in asset value at the time, according to earlier Ondo coverage.

The company says each tokenized security is backed by the related stock, ETF, or cash held with US-registered broker-dealers. An independent verification agent checks the asset backing, while a security agent holds an interest in the collateral.

Ondo’s disclosures state that buyers receive economic exposure to price movements and reinvested dividends after applicable tax withholding. Holders do not own the referenced stock or ETF directly and do not receive the same rights as registered shareholders.

Late in July, Ondo secured FINRA authorization connected to its US tokenized-equity operations. The company said at the time that its tokenized products had exceeded $2.5 billion in total value locked, while Ondo Stocks had processed more than $7 billion in cumulative volume.

Such tokenized products differ from the perpetual futures covered by the latest letters. Stock tokens provide an indirect economic interest backed by securities or cash, while perpetuals are derivative contracts designed to track the price of a referenced share without transferring ownership.

SEC and CFTC coordination could shape access

Ondo submitted its letters while federal agencies were reconsidering how securities and derivatives rules should apply to blockchain-based markets.

In March, the SEC and CFTC signed a memorandum of understanding to coordinate work in areas where their authority overlaps. The agreement created a formal process for sharing information, developing policy, and resolving questions involving products that may fall under both securities and commodities law.

Security futures require such coordination because the SEC oversees securities markets and the CFTC regulates US futures and derivatives venues. A perpetual tied to an individual stock could therefore require approval or supervision from both agencies.

Political attention has also turned toward bringing offshore perpetual markets into the country. President Donald Trump said in August that CFTC Chair Michael Selig was working to bring Hyperliquid to the United States in a “fully compliant and legal fashion.”

Neither the CFTC nor Hyperliquid has publicly explained how access would operate. Hyperliquid is best known for onchain perpetual futures, while its HYPE token climbed more than 20% after Trump’s comments and gained nearly 49% over the following month to trade around $81 on Wednesday, according to CoinGecko.

Regulators are separately examining the infrastructure needed to support tokenized securities. On Tuesday, the SEC proposed updating transfer-agent rules covering registration, recordkeeping, transfer processing, cybersecurity, and the protection of securities and customer funds.

Most existing transfer-agent requirements date from the late 1970s and early 1980s, when paper certificates and manual ownership records remained common. Under the proposed rules, onchain transfer agents would need controls protecting digital records from unauthorized changes, deletion, and operational failures.

The SEC said the amendments would remain technology-neutral and would not require companies to use blockchain systems. Public comments will remain open for 60 days after the proposal appears in the Federal Register, after which SEC staff may revise the text before commissioners consider a final rule.