AVAX One, a Nasdaq-listed digital asset treasury company, has agreed to tougher debt terms with an institutional lender that exclude its nearly 14 million AVAX tokens, worth about $88 million, from a new minimum liquidity requirement.

AVAX One’s lender has tightened the terms of its debt agreement refusing to count the company’s Avalanche (AVAX) tokens toward a new minimum liquidity requirement.

The lender has also accelerated capital recovery, increasing monthly redemptions to one-tenth of the original principal from one-twenty-fifth.

The amended terms require AVAX One to maintain at least $3.5 million in liquidity, with only cash and Bitcoin eligible to meet the threshold. This means the company’s large AVAX treasury cannot be used to meet the requirement regardless of its market value.

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The company also paid $1.3 million to secure a waiver of a default and agreed to faster debt repayments, with monthly redemptions rising to one-tenth of the original principal from one-twenty-fifth.

The tighter terms highlight a key distinction between crypto treasury assets and liquid reserves:

While AVAX One’s AVAX holdings represent a substantial asset base, its lender does not regard those tokens as equivalent to cash or Bitcoin for meeting near-term liquidity obligations.

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AVAX One’s shares have fallen about 42% since July’s departure of CEO, Jolie Kahn.

The move underscores the gap between AVAX and more liquid assets such as cash and Bitcoin in the eyes of institutional lenders, despite AVAX One holding millions of tokens.

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