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AVAX One tightens liquidity rules, excluding its AVAX token

An institutional lender required a 3,400% jump in AVAX One’s minimum liquidity to $3.5 million, recognizing only bank cash and Bitcoin held in custody.

Reported · Written up by our desk · Market Structure

AVAX One has agreed to a major debt restructuring that tightens its liquidity requirements and prevents its namesake Avalanche token from counting toward the new threshold, according to a Aug. 5 SEC filing reviewed by CryptoSlate.

The lender waived a default tied to a key-person covenant after AVAX One paid $1.3 million, and the company accepted harsher terms. The minimum liquidity requirement was increased 3,400% to $3.5 million from $100,000, with the amended test recognizing only bank cash and Bitcoin held in custody.

The filing said AVAX One also retired $6.8 million in outstanding principal debentures as part of the broader restructuring, leaving about $7.42 million outstanding after the payment. CoinGecko data cited by CryptoSlate indicates the firm holds nearly 14 million AVAX tokens worth about $88 million, but the lender’s liquidity rule means that token holdings cannot satisfy the threshold regardless of their market value.

AVAX One faces a 180-day deadline from CEO Jolie Kahn’s July departure to appoint a permanent chief executive acceptable to the lender, with Peter Wylie Jr. serving as interim CEO. The agreement also accelerated monthly redemptions and adjusted the conversion price to 82.5% from 85%, potentially increasing dilution if the lender converts the remaining debenture.

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