Ava, AVAX Soars 8% on Token Clarity Push With SEC, CFTC

The Blockchain Association and Ava Labs have proposed a two-tier regulatory approach for protocol tokens to the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The framework aims to clarify the status of tokens by dividing them into two categories: those sold before deployment, treated as investment contracts under the SEC's jurisdiction, and those already functioning in live systems, governed by the CFTC as commodities. According to the meeting with the SEC's Crypto Task Force is part of broader efforts to align crypto regulations with existing financial frameworks.

The proposal has drawn attention from investors and market participants, as it could provide much-needed clarity in a sector long plagued by regulatory uncertainty. Ava Labs, a key developer of the Avalanche blockchain, emphasized the need for consistent disclosure standards and investor protection without stifling innovation. The firm also highlighted the importance of responsible innovation as a key pillar of the proposed regulatory model.

Market reactions have been swift. The price of AVAX, Avalanche's native token, surged nearly 8% in the past 24 hours, reaching $14.58. Derivatives traders also signaled optimism, with open interest in AVAX futures jumping over 8% across major exchanges. The momentum was further supported by Avalanche's inclusion in the Bitwise 10 Crypto Index ETF (BITW), a move that could expand institutional exposure to the asset.

A Global Shift in Crypto Oversight

Regulatory shifts are not confined to the U.S. In Japan, the Financial Services Agency (FSA) has announced a major overhaul of crypto regulation, moving oversight from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA). This shift is intended to better align crypto with securities markets and investment products. The FSA emphasized the increasing role of crypto as a financial instrument, necessitating stronger investor protections and transparency.

One of the key aspects of the new Japanese framework is the enhanced regulation of initial exchange offerings (IEOs). Exchanges will be required to provide pre-sale disclosures, including detailed information about the entities behind token projects. Independent third-party code audits and input from self-regulatory organizations will also be mandated. These measures aim to mitigate risks associated with unregistered platforms and unvetted projects.

The Roadmap for Innovation

Meanwhile, on the innovation front, Mutuum Finance—a decentralized lending protocol—is nearing $20 million in funding as it moves through key development phases. The project has completed phase two of its roadmap, refining borrowing logic, liquidation behavior, and collateral handling. These adjustments are preparing the platform for public testing and ensuring robust performance under varying market conditions according to the announcement.

Mutuum Finance's dual-lending model is a central feature of its design. Lenders supply assets such as ETH or USDT and receive mtTokens, which increase in value as borrowers repay interest. Borrowers, on the other hand, interact with variable interest rates tied to liquidity levels. This system aims to provide predictable yields for lenders while maintaining flexibility for borrowers.

Security remains a top priority for the project. The protocol has completed a CertiK audit and is undergoing a deeper review by Halborn Security. These evaluations are focused on core lending contracts, liquidation rules, and interest systems. Additionally, a $50,000 bug bounty program is in place to encourage developers to identify potential vulnerabilities. These layers of scrutiny are essential ahead of the project's public release.

Looking ahead, Mutuum Finance plans to expand to multiple layer-2 networks. This move is expected to reduce transaction fees and support higher activity levels. The project is also developing a USD-pegged stablecoin, which it hopes will anchor borrowing activity and reduce volatility exposure for users. These innovations highlight the ongoing efforts to build a resilient and scalable DeFi ecosystem.

Regulatory Clarity as a Foundation for Growth

The push for regulatory clarity is not limited to tokens and lending protocols. Treasure Global, a Malaysia-based fintech company, is accelerating the launch of its OXI wallet and has secured its first corporate client. The wallet is a key component of the company's strategy to expand into payments, asset tokenization, and broader blockchain-enabled financial services. Treasure Global's ZCITY Super App, which already has over 2.7 million users, is set to benefit from the integration of OXI, further solidifying the company's position in Malaysia's digital economy.

The company's forward-looking strategy is supported by a strong emphasis on compliance and risk management. As digital assets continue to mature into mainstream financial infrastructure, Treasure Global aims to capture growing market demand by offering innovative yet secure solutions. The expansion of its digital asset strategy is expected to contribute significantly to the company's long-term growth and diversification according to the announcement.

Market Reactions and Investor Sentiment

Investor sentiment in the crypto space is closely tied to regulatory developments and technological progress. The recent surge in AVAX prices and the increased volume in futures markets reflect a growing confidence in the sector. Traders and institutions are increasingly viewing crypto as a legitimate asset class, with derivatives markets playing a critical role in price discovery and risk management. This trend is likely to continue as more projects achieve operational maturity and regulatory clarity improves.

The broader market environment also shows signs of optimism. As companies like Mutuum Finance and Treasure Global push forward with their roadmaps, the ecosystem is demonstrating a capacity for innovation and resilience. However, investors remain cautious, particularly as macroeconomic conditions and regulatory uncertainty persist. The coming months will be crucial in determining how these developments translate into long-term market stability and growth.