Cryptocurrency markets suffered a brutal sell-off this week as investor concerns mount over stagnating US liquidity following US President Donald Trump’s nomination of Kevin Warsh to head the Federal Reserve.
According to data from ETF funds that record three consecutive days of bitcoin outflows, $431 million is withdrawn on Thursday data from Farside Investors. The price of Bitcoin (BTC) briefly dropped to $60,074 on Friday before rising above $64,930 at 7:49 a.m. UTC.
Warsh – who previously served as Fed governor from 2006 to 2011 – is expected to continue his rate-cutting trajectory. His appointment could also signal that broader market liquidity is expected to “stabilize rather than increase significantly,” Thomas Perfumo, an economist at cryptocurrency exchange Kraken, told Cointelegraph.
The industry recorded its 10th largest liquidation on January 31, when over $2.56 billion in leveraged positions were liquidated. According to to the CoinGlass derivatives data platform.
TRM Labs Completes $70 Million Investment Round for $1 Billion and Becomes a Crypto Unicorn
Blockchain intelligence platform TRM Labs has completed a $70 million Series C funding round, valuing it at $1 billion, becoming the latest crypto company to achieve unicorn status.
The investment round was led by seed investor Blockchain Capital, with participation from Goldman Sachs, Bessemer Venture Partners, Brevan Howard Digital, Thoma Bravo, Citi Ventures and Galaxy Ventures, according to Wednesday’s press release.
TRM Labs strives to equip public and private institutions with AI solutions to combat cybercrime. The company defends itself against illegal activities, which are increasingly based on automation.
“At TRM, we create AI for problems that have real consequences for public safety, financial integrity and national security,” wrote Esteban Castaño, co-founder and CEO of TRM Labs.
“This funding allows our world-class team – and those who join us next – to innovate with institutions on the front lines facing the most significant threats and expand the potential of artificial intelligence to significantly improve how we protect our critical systems.”
The $70 million round shows capital flowing into blockchain analytics platforms in an effort to stem the spread of AI-enabled fraud and cyberattacks, including from huge customary institutions.
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Tokenization avalanche peaks in Q4 as BlackRock’s BUIDL expands across the network
In the fourth quarter, the Avalanche blockchain network saw an enhance in institutional adoption across tokenized money market funds, loans and indices, driving the value of real-world assets (RWA) in Layer 1 to recent highs.
The total value of locked tokenized RWA assets on Avalanche increased 68.6% in the fourth quarter of 2025 and almost 950% on the year to over $1.3 billion, led by the launch of the $500 million BlackRock USD Institutional Digital Liquidity Fund (BUIDL) in November, according to Messari research analyst Youssef Haidar he said in a report dated January 29.
Haidar said Fortune 500 fintech FIS has partnered with Avalanche-based Intain platform to launch tokenized lending in November, further increasing Avalanche’s TVL. Intain enables 2,000 U.S. banks to securitize more than $6 billion in loans on Avalanche.
S&P Dow Jones also partnered with Dinari, a blockchain powered by Avalanche, to launch the S&P Digital Markets 50 Index, which tracks 35 cryptocurrency-related stocks and 15 crypto tokens on Avalanche.
Traditional financial firms are becoming more willing to experiment with tokenization as the Securities and Exchange Commission has become more open to crypto products over the past year.
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ParaFi Capital is investing $35 million in Solana-based Jupiter
Jupiter said it has secured a $35 million strategic investment from ParaFi Capital, marking the first time the Solana-based onchain trading and liquidity aggregation protocol has moved outside capital after years of initial growth.
The transaction involved token purchases at market prices without a discount or extended suspension period and was settled in full in Jupiter’s JupUSD stablecoin, the companies said. Financial terms beyond the $35 million investment were not disclosed.
According to the company, the investment comes as Jupiter has processed over $1 trillion in trading volume over the past year and has expanded its business beyond swap routing into perpetual, lending and stablecoins.
The deal also included warrants allowing ParaFi Capital to acquire additional tokens at higher prices, which the companies said would reflect long-term alignment.
The investment follows the recent expansion of Jupiter’s product offering. In October, Jupiter rolled out a beta version of its onchain prediction market co-developed with Kalshi, and then in January launched JupUSD, a dollar-pegged stablecoin sourced from Solana and built in partnership with Ethena Labs.
According to CoinGecko data, Jupiter’s native token (JUP) has increased by approximately 9% in the last 24 hours.
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Aave silences Avara and retires family wallet in recent DeFi version
Aave Labs said it is discontinuing its “umbrella brand” Avara as part of the company’s latest move to refocus on decentralized finance and simplify its brand.
Founder and CEO of Aave Stani Kulechov sent On Tuesday, X ta Avara, a company with projects including the Family crypto wallet and previously the Lens social media platform, “is no longer needed as we focus on bringing Aave to the masses.”
Kulechov said the Apple iOS-based Family cryptocurrency wallet was also shut down because the team “learned that onboarding millions of users requires purpose-built experiences like savings, rather than generic, open wallets.”
The move is Aave’s latest effort to refocus on products like its flagship lending protocol, with the project handing over management of Lens to the Mask Network last month and Kulechov saying Aave’s participation in the protocol would be circumscribed to an advisory role, freeing it up to focus on DeFi.
Kulechov said in his latest post that Aave “is now united as one team of world-class designers, engineers and smart contract experts, focused on one mission: making DeFi accessible to everyone.”
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Breach of Step Finance’s treasury portfolios, outflow of $27 million from SOL as a result of STEP’s 90% failure
Step Finance, a decentralized financial portfolio tracker on Solana, has revealed a security breach that compromised several treasury wallets, causing a acute sell-off of its native token.
“Earlier today, several of our treasury wallets were compromised by a sophisticated actor during business hours in the APAC region. This was an attack carried out using a well-known attack vector” – platform he wrote in a post on X, adding that they have taken “remedial” steps.
Onchain data verified by blockchain security company CertiK can be seen that approximately 261,854 Solana (SOL) (worth approximately $27.2 million) were unstakeable and transferred from wallets controlled by Step Finance.
Step Finance has not yet confirmed the total scale of losses. The team also did not reveal how the attacker gained access or whether the incident resulted from a intelligent contract flaw, captured keys, or an internal access issue. It is also unclear whether any user funds, beyond assets owned by the protocol, were affected.
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DeFi market overview
According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the red.
The privacy-preserving token Zcash (ZEC) fell 35%, recording the biggest drop in the top 100 this week, followed by the Story token (IP), which fell 34% last week.
Thank you for reading our roundup of the most crucial events in DeFi this week. Join us this Friday for more stories, insights and education about this energetic space.
