Cryptocurrency markets saw a brutal sell-off this week as investor concerns have increased on the stagnation of American liquidity following the appointment by American President Donald Trump of Kevin Warsh as head of the Federal Reserve.
Bitcoin Exchange Traded Funds (ETF) saw three straight days of outflows, with $431 million in outflows on Thursday, according to data from Farside Investors. Bitcoins (BTC) price briefly fell to $60,074 on Friday before rising back above $64,930 at 7:49 UTC.
Warsh – who served as Fed governor from 2006 to 2011 – is expected to continue his trajectory of lowering interest rates. His appointment could also signal that broader market liquidity is expected to “stabilize rather than expand significantly,” Thomas Perfumo, an economist at crypto exchange Kraken, told Cointelegraph.
The sector recorded its 10th largest liquidation event on January 31, as more than $2.56 billion in leveraged positions were wiped out. according to to the CoinGlass derivatives data platform.
TRM Labs Completes $70M-$1B Investment Round 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 a press release issued Wednesday.
TRM Labs seeks to equip public and private institutions with AI solutions that combat cybercrime. The company defends itself against illicit activities that increasingly rely on automation.
“At TRM, we develop AI to solve 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 enables our world-class team – and those who join us next – to innovate alongside institutions on the front lines against the most serious threats, and expand the potential of AI to significantly improve the protection of our critical systems. »
The $70 million round shows capital flowing into blockchain analytics platforms seeking to stop the spread of AI-powered scams and cyberattacks, including from large traditional institutions.
Avalanche Tokenization Peaks in Q4 as BlackRock’s BUIDL Grows On-Chain
Blockchain Avalanche Network saw increasing institutional adoption of tokenized funds, loans, and money market indices in the fourth quarter, pushing the value of real-world assets (RWA) on Layer 1 to a new high.
The total value locked of tokenized RWAs on Avalanche increased 68.6% during the fourth quarter of 2025 and nearly 950% year-over-year to over $1.3 billion, boosted by the $500 million BlackRock USD Institutional Digital Liquidity Fund (BUIDL) launched in November, Youssef Haidar, research analyst at Messari. said in a January 29 report.
Fortune 500 fintech FIS partnered with Avalanche-based Intain Marketplace to launch tokenized loans in November, strengthening Avalanche’s TVL, Haidar said. Intain enables 2,000 US banks to securitize more 6 billion dollars in loans we 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 companies are growing more confident about experimenting with tokenization as the Securities and Exchange Commission has become more open to crypto products over the past year.
ParaFi Capital invests $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 on-chain trading and liquidity aggregation protocol has taken outside capital after years of accelerated growth.
The transaction involved purchases of tokens at market prices with no discount and an extended lock-up period and was fully settled in Jupiter’s JupUSD stablecoin, the companies said. Financial terms beyond the $35 million investment were not disclosed.
The investment comes as Jupiter has processed more than $1 trillion in transaction volume over the past year and expanded beyond swap routing to perpetuals, loans and stablecoins, according to the company.
The deal also included warrants allowing ParaFi Capital to acquire additional tokens at higher prices, a structure the companies said was intended to reflect long-term alignment.
This investment follows a recent expansion of Jupiter’s product offerings. In October, Jupiter rolled out a beta version of its on-chain prediction market developed with Kalshi, followed in January by the launch of JupUSDa stablecoin native to Solana and pegged to the dollar, built in partnership with Ethena Labs.
The native token of Jupiter (Jupp) is up about 9% in the past 24 hours, according to CoinGecko data.
Aave Terminates Avara, Phases Out Family Wallet Amid DeFi Refocus
Aave Labs has announced the removal of its Avara “umbrella brand” as part of the company’s latest move to refocus on decentralized finance and simplify its branding.
Stani Kulechov, founder and CEO of Aave job Tuesday
Kulechov said that the Apple iOS-based family crypto wallet was also being liquidated as the team “learned that onboarding millions of users requires purpose-built experiences, such as savings, rather than generic, open wallet experiences.”
The move marks Aave’s latest effort to refocus on products such as its flagship lending protocol as a project entrusted with the management of Lens at Mask Network last month, Kulechov said that Aave’s participation in the protocol would be reduced to an advisory role so that it could focus on DeFi.
Kulechov said in his latest post that Aave is “now united as a single team of world-class designers, engineers, and smart contract experts, aligned around a single mission: bringing DeFi to everyone.”
Step Finance Cash Portfolios Breached, $27 Million of SOL Drained as STEP Collapses 90%
Step Finance, a decentralized financial portfolio tracker on Solana, revealed a security breach that led to multiple treasury wallets being compromised, triggering a sharp sell-off of its native token.
“Earlier today, several of our treasury wallets were compromised by a sophisticated actor during APAC hours. This was an attack facilitated by a well-known attack vector,” the platform said. wrote in an article on X, adding that they have taken “remedial” measures.
Onchain data examined by blockchain security firm CertiK watch that approximately 261,854 Solana (GROUND) (worth approximately $27.2 million) was not staked and transferred from wallets controlled by Step Finance.
Step Finance has not yet confirmed the full extent of the losses. The team also did not reveal how the attacker gained access, or whether the incident stemmed from a smart contract flaw, compromised keys, or an internal access issue. It is also unclear whether user funds were affected, beyond assets owned by the protocol.
DeFi Market Overview
According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market cap ended the week in the red.
Zcash that preserves confidentiality (ZEC) fell 35% to record the biggest decline of the week in the top 100, followed by the Story token (IP), down 34% over the past week.
Thank you for reading our summary of this week’s most notable DeFi developments. Join us next Friday for more stories, ideas and information about this dynamically evolving space.
