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Investigation of potential risks in fund tokenization conducted by Moody's. One fund previously rated experiences a downgrade.

Yesterday, Moody's released an analysis on the tokenization of funds, utilizing insights from their appraisal of three tokenized money market funds. Among these three,

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Investigation into the potential risks of fund tokenization conducted by Moody's, resulting in a...
Investigation into the potential risks of fund tokenization conducted by Moody's, resulting in a downgrade for a previously rated asset.

Investigation of potential risks in fund tokenization conducted by Moody's. One fund previously rated experiences a downgrade.

In a significant move for the blockchain industry, Moody's has assigned an "A" rating to OpenEden's TBILL tokenized US Treasury Bill product. This rating, indicative of upper-medium grade quality with low credit risk and strong capacity to meet financial obligations, is a key factor in establishing the credibility of the TBILL token as a regulated, secure, and yield-generating asset [1][2][3][4].

Launched in 2023, the TBILL token represents fractionalized shares of a portfolio of short-dated US Treasury Bills and overnight reverse repurchase agreements (ON RRP), both instruments known for minimal credit risk. The product has seen rapid growth, with assets under management (AUM) increasing 156% to $287 million in 2025, driven by demand from professional and institutional investors such as hedge funds and family offices [1][2][4].

OpenEden's partnership with BNY Mellon further bridges traditional finance and blockchain technology. BNY Mellon acts as custodian of the underlying assets, while its Dreyfus arm manages the fund. This partnership adds legacy finance trust and operational infrastructure, facilitating the secure custody and management of these tokenized assets [1][2][3][4].

Regarding allegations against co-founder Eugene Ng, available sources do not mention any allegations made by Eugene Ng nor any Moody's downgrade related to the TBILL token. On the contrary, the TBILL product currently holds a strong Moody's rating without reported controversy [2][4].

The TBILL token is not alone in the fund tokenization space. The ULTRA fund, with a smaller AUM of $22 million, most of which is held by Ondo Finance, and JTRSY, with the second highest AUM, closely following TBILL, also operate in this sector [5]. Interestingly, only one of the three funds lacks a strong link to a traditional financial institution.

The benefits of fund tokenization include the ability to trade 24/7, fractionalization, and potential cost savings for asset managers. However, it also exposes funds to more potential blockchain disruptions and raises concerns about the lack of track records of the tokenization startups and/or asset managers, as well as potential regulatory issues [6].

References:

  1. Moody's press release on TBILL rating
  2. The Wall Street Journal article on TBILL product
  3. BNY Mellon's press release on partnership with OpenEden
  4. OpenEden's press release on TBILL product growth
  5. CoinDesk article on the three tokenized funds
  6. Moody's analysis of fund tokenization

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