The U.S. Securities and Exchange Commission’s Crypto Task Force held a high-level meeting with several major industry groups, deepening its review of how protocol tokens should be governed under U.S. financial law. Representatives from Ava Labs, the Blockchain Association, The Digital Chamber, and Sidley Austin LLP participated, according to a newly published agency memo.
The discussion centered on ongoing regulatory ambiguity surrounding crypto assets and how responsibilities should be divided between the SEC and the Commodity Futures Trading Commission (CFTC). The session follows renewed coordination between the agencies, alongside policy guidance from the President’s Working Group on Financial Markets, which has emphasized strengthening digital-asset oversight.
Industry Proposes Two-Step Regulatory Model
Ava Labs—the developer behind the Avalanche blockchain—together with legal advisers from Sidley Austin, outlined a dual-phase regulatory model intended to bring consistency to token classification. Under the structure:
- The SEC would regulate the initial sale of protocol tokens before they achieve full network functionality, treating these offerings as investment contracts.
- Once a token becomes integral to a live, operational blockchain, the CFTC would oversee its secondary-market activity under existing commodity definitions.
Industry groups argue this approach would clarify jurisdictional overlap without requiring new legislation. They also emphasized that clearer rules could encourage compliant token issuance within the United States, complementing objectives in the ongoing Crypto Market Structure bill.
During the meeting, representatives from Ava Labs, the Blockchain Association, and The Digital Chamber underscored the need for uniform disclosure standards, a roadmap for compliant token launches, and safeguards to ensure investor protection while still supporting blockchain innovation.
Avalanche Sees Strong Market Reaction
The regulatory dialogue comes as Avalanche’s native token, AVAX, delivers one of the strongest performances among major cryptocurrencies. AVAX surged nearly 8% over the past 24 hours to $14.58, trading between $13.53 and $14.71 during the session. Trading volume jumped 48%, signaling heightened interest across spot markets.
Momentum has also accelerated in derivatives markets. CoinGlass data shows AVAX futures open interest has climbed 8% in 24 hours to $547.81 million, with major increases across:
- Binance: +9%
- OKX: +10.5%
- Bybit: +2%
The rally follows news that Avalanche has been added to the Bitwise 10 Crypto Index ETF (BITW), with Bitwise calling the platform “a leading foundation for institutional blockchain adoption and real-world asset tokenization.”
As regulatory discussions progress, market analysts say the outcome may shape how quickly U.S. institutions expand exposure to blockchain networks like Avalanche.