The Block founder Mike Dudas: Ondo will end in tears

Ondo Finance (ONDO) has recently surged more than sixfold since its listing due to the discussion of Real World Assets (RWA). However, the issuance of stablecoins backed by U.S. treasuries by Ondo Finance has been predicted by The Block founder Mike Dudas to end in tears.

Ondo Finance ONDO has recently seen its price surge over six times since its listing due to the discussion of RWA real-world assets. However, The Block founder Mike Dudas believes that Ondo Finance, which issues interest-bearing stablecoins through the issuance of U.S. Treasury bonds, will end in tears.

The main reason is that Mike Dudas uncovered some conversations on Twitter where popular investors praised ONDO, believing that its collaboration with BlackRock was good for brand marketing. Additionally, the super low circulation volume made investors on Coinlist feel profitable and reduced the direct dumping behavior.

Mike Dudas further revealed statements made by Ondo Finance CEO Nathan Allman in 2023, stating that Ondo Finance's stablecoin OUSG is backed by U.S. Treasury bonds and has always positioned itself as a security, applicable under the exempt offering Regulation D rules.

Mike Dudas directly tagged the U.S. SEC in this tweet and called out Ondo Finance to inform the SEC that Ondo Finance hopes to classify its stablecoin as a security.

Companies like Ondo Finance, which claim to be exempt-qualified crypto firms, are not uncommon in the era of STO security token issuance. However, most of these companies only sell to non-U.S. residents and believe they will not be regulated. Mike Dudas may believe that Ondo Finance's self-proclaimed security status does not completely avoid regulatory risks. Alternatively, the way it creates high market value through low circulation may not be appealing to him.