Key Points
- Avalon Labs is developing a Bitcoin-backed public debt fund under the US SEC framework.
- The company aims to bridge traditional finance and crypto by exploring regulated investment structures.
Avalon Labs, a renowned BTCFi lending platform, is working towards introducing Bitcoin-backed financial offerings to both crypto followers and general users. The company is currently investigating the possibility of creating a Bitcoin-backed public debt fund under the guidelines of the US Securities and Exchange Commission (SEC).
Avalon Labs sees Bitcoin as a form of “Digital Gold”, and believes that with the increasing integration of Bitcoin by financial institutions and the recent introduction of spot Bitcoin ETFs, now is the perfect time to introduce its product.
Unlocking Bitcoin DeFi Yield
Moreover, Avalon Labs aims to unlock Bitcoin DeFi yield via a product that is user-friendly for everyone, even those new to cryptocurrency. The company views this initiative as a significant step in its quest to establish the leading on-chain capital market for Bitcoin.
According to Avalon Labs, this mission will assist in eliminating the divide between traditional finance and crypto. The platform aims to bridge these two financial realms by exploring regulated investment structures, thereby unlocking new opportunities for Bitcoin-backed products. The lending platform shared its vision on the X platform, stating, “Bitcoin is one of the greatest financial innovations in history. At Avalon Labs, we are committed to making it accessible to everyone. Together, let’s shape the future — let’s make history.”
Regulation A for Bitcoin-Backed Lending Products
Avalon Labs is considering the potential application of Regulation A, a US securities exemption, to bring its Bitcoin-backed lending products to the market. According to the Securities Act of 1933, Regulation A allows companies to raise capital from both accredited and non-accredited investors through a public offering, bypassing the more extensive requirements of full SEC registration.
Regulation A, often referred to as a “mini-IPO”, is frequently used by fund managers and private companies to access public markets whilst maintaining regulatory compliance. This exemption provides a structured framework for issuing securities to retail investors and ensures transparency through SEC-reviewed offering circulars and regular reporting.
Avalon Labs is examining how this regulatory structure could be applied to the crypto industry, potentially providing retail investors with new opportunities to access Bitcoin-denominated financial products. Venus Li, the co-founder of Avalon Labs, stated, “We have spent years researching how Regulation A has been applied in traditional finance and whether it could be a viable path for crypto companies. While successful precedents in the crypto industry are limited, our analysis of previous SEC-approved cases suggests a viable path forward.”
