Tokenization platform Ondo Finance was shopped to prospective buyers following the sudden death of its founder and CEO, Nathan Allman, earlier this year, according to three people with knowledge of the matter.

The outreach occurred sometime after Allman's death on May 25, according to two of the people, who spoke on condition of anonymity because the matter is private. Exactly who was behind the attempts to sell the company remains unclear.

An escalating legal fight over control of the firm has likely put any plans for a sale on hold, one of the people said. The episode highlights how the death of a founder without a will can leave a company's ownership to be settled in probate court rather than in the boardroom.

A bitter fight for control

In early August, Allman's estate filed suit against Ondo's acting CEO, Ian De Bode, alleging an unlawful power and money grab and setting off a bitter battle over corporate control.

Allman died unexpectedly and without a will at the age of 32, leaving uncertainty over the fate of his controlling stake in Ondo Finance and his massive trove of ONDO tokens. After a probate process, his estate was awarded to his parents, 77-year-old Kathleen Allman and 82-year-old Lawrence Allman.

Under a current court order, De Bode remains Ondo's CEO and can oversee day-to-day operations, but he cannot make major changes to the company while the dispute over its control is being resolved. In a separate court petition, Allman's half-sister and an Ondo investor sought to limit Kathleen Allman's control over her share of the estate. Kathleen Allman denied the petition's allegations.

How the competing cases are resolved will determine who ultimately controls Allman's stake — and, with it, the direction of one of crypto's largest tokenization platforms. Until the dispute is settled, the court order effectively blocks major strategic decisions at the firm.

Ondo denies any sale process

An Ondo spokesman denied that the company was, at any point, looking for buyers, calling talk of a potential sale "wholly untrue."

"Nobody at the company has shopped it for sale, been sales talks, or engaged or asked anyone to do so on its behalf. There are no facts to support this," the spokesperson added.

Allman's estate declined to comment.

One of the largest real-world asset platforms

Founded in 2021 by former Goldman Sachs executives, New York-based Ondo offers tokenized U.S. Treasuries and stocks and has more than $3.8 billion across its products, making it one of the largest platforms for real-world assets on blockchain. The firm's OUSG fund holds investments in BlackRock's tokenized BUIDL fund. Tokenized Treasuries place traditional government debt on blockchains, a category that has drawn participation from established traditional finance firms such as BlackRock.

Ondo did not disclose a valuation in either of its announced funding rounds, and CoinDesk was unable to determine what price was discussed during the sale talks.

The company has raised $24 million in equity funding: $4 million in 2021 and $20 million in 2022. A separate $10 million token sale brings publicly reported fundraising to $34 million. Ondo's equity backers include Pantera Capital, Founders Fund, Coinbase Ventures and Tiger Global.

Reported amid a wave of crypto dealmaking

The reported sale effort came amid a wave of crypto dealmaking, including acquisitions aimed at expanding tokenized finance. Announced crypto mergers and acquisitions totaled $12.9 billion in the second quarter, the industry's second-largest quarterly sum, according to Architect Partners.

The quarter's biggest deal was Bullish's $4.2 billion acquisition of transfer agent Equiniti, a bet on bringing traditional financial assets onto blockchain rails. Bullish is the parent company of CoinDesk.

Source: CoinDesk