Avalon Labs Considers First Bitcoin-Backed Debt Public Fund, Targeting Retail Investors

Avalon Labs, a company focused on building on-chain financial products for Bitcoin (BTC), is exploring the possibility of launching a first Bitcoin-backed debt-focused public fund in the US.

On Feb. 12, Avalon Labs announced in its X post that it is exploring the potential for this fund to align with the US Securities and Exchange Commission’s (SEC) Regulation A exemption.

This regulatory pathway, often referred to as a “mini-IPO,” allows companies to raise capital from both accredited and non-accredited investors through a public offering without the extensive requirements of full SEC registration.

While no official timeline has been announced, Avalon Labs is currently in the exploratory phase, evaluating regulatory frameworks and consulting with industry professionals to determine the feasibility of such a fund.

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

Avalon Labs Targets US Expansion

The initiative is part of Avalon Labs’ broader strategy to expand its Bitcoin lending business into the US market through regulated investment structures.

Avalon Labs aims to position itself as an early mover in regulated Bitcoin-backed financial products. By leveraging Regulation A, the company seeks to create new opportunities for retail investors to access Bitcoin-backed financial instruments within a structured and transparent framework.

This approach aligns with Avalon Labs’ mission to transform Bitcoin from a static asset into a dynamic financial instrument, making it accessible to all types of investors.

Crypto Offerings with Bitcoin-Backed Products

Avalon Labs offers users a variety of crypto-centered products.

Avalon’s Bitcoin-backed stablecoin USDa, which currently has a market cap of over $271 million, allows users to unlock the value stored in their Bitcoin by collateralising it at a fixed rate of 8%. The company also offers a Bitcoin-backed lending service, yield-generating accounts and a credit card.

In December, Avalon Labs raised $10 million in a Series A round led by Framework Ventures. The fundraising also attracted participation from UXTO Management, Presto Labs and Kenetic Capital. The company plans to use the fresh capital to expand its decentralized finance (DeFi) ecosystem on Bitcoin.

As 2024 comes to a close, here is a brief recap.

🔸Kicked off in March 2024 with our SEAL Team 6
🔸Built the first $BTC lending on @MerlinLayer2
🔸Raised 1.5M in our seed rounds with investors from @SummerEverest, @snzholding, @Matrixport_EN, @capital_spark & @ViabtcCapital… pic.twitter.com/2IrKTT5xsf

— Avalon Labs 🎩🔮 (@avalonfinance_) December 31, 2024

According to DeFiLlama data, Avalon Labs’ total value locked (TVL) peaked at $2.05 billion on Jan. 31 before falling to $1.77 billion on Feb. 12.