Avalon Labs Plans Bitcoin-Backed Debt ETF Launch

The Bitcoin-based DeFi project Avalon Labs is considering filing an application with the SEC to create the industry’s first ETF backed by digital gold debt.

Avalon Labs: Opening the Door for Massive Adoption of Bitcoin-Backed Products

Avalon is on a mission to bring Bitcoin-backed financial products to both crypto and non-crypto users alike. Bitcoin, the only true digital gold, has already proven its value. With more financial… pic.twitter.com/JA4dh7EMMx

— Avalon Labs ?? (@avalonfinance_) February 12, 2025

The organization aims to increase the accessibility of financial products based on the first cryptocurrency in compliance with regulatory requirements.

Registering the exchange-traded fund will allow the expansion of Bitcoin lending business into TradFi through regulated structures.

To implement the initiative, Avalon Labs will engage leading law firms. They will assist in evaluating the regulatory framework of the proposed instrument and preparing the necessary materials for the application.

The ETF is expected to be structured to meet the criteria for exemption from Regulation A+ in the Securities Act of 1933.

Upon registration, retail investors will gain access to Bitcoin-backed financial products within a familiar structure.

“While successful precedents in the crypto industry are limited, our analysis of previous SEC-approved cases points to a viable path forward. The agency’s role is to protect ordinary investors and ensure fairness, not to hinder technological progress,” commented Avalon Labs co-founder Venus Lee.

XRP-ETF

On February 13, the SEC may consider Grayscale’s application for a spot XRP-ETF, according to FOX Business journalist Eleanor Terrett.

As per this very helpful table from @JSeyff and @EricBalchunas, we could see the @SECGov acknowledge @Grayscale’s $XRP spot ETF filing as early as Thursday (2/13), if indeed it chooses to acknowledge it. The SEC usually has around 15 days to acknowledge a 19b-4 filing and… https://t.co/cN9skLUSHq

— Eleanor Terrett (@EleanorTerrett) February 11, 2025

Terrett responded to Bloomberg analysts’ opinions regarding the prospects for approval of exchange-traded funds based on Litecoin, Solana, Dogecoin, and XRP.

Experts suggested that 19b-4 applications for the latter two assets will be considered this week (the first two have already been implemented).

“The SEC usually has about 15 days to confirm, and Grayscale submitted its proposal for conversion on January 30. In any case, this should give us a good idea of how the current Commission views XRP,” commented the journalist.

Bloomberg estimated the likelihood of approval for ETFs based on all the mentioned altcoins at 65-90%. The final deadline for document review will be in October.

Previously, NYSE Arca filed an application in form 19b-4 to convert Grayscale Cardano Trust into an ETF.

Back in January, Avalon Labs introduced the governance token AVL. 20% of the total supply of the asset is intended for user rewards.

Forbes author Lior Shimron predicted “exponential growth” of Bitcoin-DeFi in 2025. A similar opinion was expressed by Michael Harvey from Galaxy Digital.