RFS DeFi Risk Intelligence Weekly

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Welcome to another edition of RFS DeFi Risk Intelligence Weekly!

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📰 Stock Market Highlights for Bitcoin (BTC)

• The price is 112094.0 USD currently with a change of 1295.00 USD (0.01%) from the previous close

• The intraday high is 112468.0 USD and the intraday low is 110258.0 USD

📸 Market Snapshot

🏛️ Policy & Regulation

Commodity Futures Trading Commission (CFTC) & Security Exchange Commission (SEC) staff joint statement clarifies that registered exchanges aren’t barred from listing/facilitating trading in certain spot crypto commodity products—constructive for U.S. venue optionality.

Key Takeaways:

• Venue Optionality: It creates more options for trading digital assets within the existing U.S. regulatory framework, moving a portion of the market from unregulated venues to regulated ones.

• Regulatory Coordination: The statement signals a new era of cooperation between the two agencies, a significant departure from previous regulatory ambiguity and "turf wars."

• Future Actions: The agencies have invited market participants to engage with them and have indicated they will expedite the review of exchange filings for new crypto product listings.

The U.S. Treasury's Request for Comment (RFC) under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) seeks public input on using innovative technologies to detect illicit activities involving digital assets. The RFC is a significant step toward implementing the GENIUS Act and shaping future regulations. The deadline for submitting comments is October 17, 2025.

Use the link here to submit comments.

Technologies Under Review 💻

The RFC is specifically interested in how regulated financial institutions could use or are already using the following four technologies to combat illicit finance:

• Application Program Interfaces (APIs): The Treasury wants to know how APIs can be used to automatically share data and access transaction information to help detect illicit activity. APIs are essentially the software intermediaries that allow two applications to talk to each other. In this context, they could be used to connect a financial institution's system with a blockchain analytics tool, enabling real-time data sharing and risk assessment.

• Artificial Intelligence (AI): The Treasury is exploring how AI can analyze large volumes of transactional data to identify complex illicit networks and patterns that traditional methods might miss. AI's ability to process massive datasets and learn from past behavior makes it a powerful tool for flagging suspicious transactions.

• Digital Identity Verification: This involves technologies that can establish and verify a person's identity in a digital environment. The RFC seeks comments on how these tools can be used in the digital asset industry to create a more reliable and secure "know your customer" (KYC) process, which is a cornerstone of anti-money laundering (AML) efforts.

• Blockchain Technology and Monitoring: This refers to the use of specialized tools that evaluate high-risk counterparties, analyze transactions across different blockchains, and trace activity to identify potential illicit transactions. The Treasury is also asking for information on how this data is integrated with off-chain data and the challenges posed by obfuscation methods like crypto mixers.

Purpose and Next Steps ➡️

The comments received will be used to inform the Treasury's research on the effectiveness, costs, privacy, and cybersecurity risks of these technologies. This feedback will form the basis for future regulatory guidance and rule-making, which will likely affect a wide range of digital asset companies. The GENIUS Act requires the Treasury's Financial Crimes Enforcement Network (FinCEN) to issue public guidance and potential new rules based on the results of this research.

🪙 Stablecoins — Liquidity Pulse

The total market capitalization for stablecoins is approaching record highs, currently ranging from approximately $280 billion to $296 billion. This significant growth underscores the increasing importance of stablecoins within the broader cryptocurrency ecosystem. Data from various crypto market trackers, including DeFi Llama and CoinMarketCap, confirms this trend and highlights strong trading volumes in August.

Key Takeaways:

• Cap Growth: The stablecoin market has seen a substantial increase, with the total market capitalization climbing to levels not seen in some time. This resurgence follows a period of stagnation and decline, which was particularly notable after significant market events in previous years, such as the collapse of the TerraUSD (UST) stablecoin.

• Strong August Volumes: August saw robust trading volumes for stablecoins, indicating improving liquidity conditions and heightened activity across the market. This suggests that more capital is moving into and through the digital asset space, with stablecoins serving as a key medium for these transactions.

• Dominant Players: The market remains highly concentrated, with Tether (USDT) and USDC (USDC) dominating the stablecoin landscape. Other stablecoins, such as Ethena's USDe and Dai (DAI), are also showing growth, but USDT and USDC together account for the vast majority of the total market supply.

• Market Confidence: The increase in stablecoin market cap and trading volume is often seen as a positive sign for the entire crypto market. It indicates that investors and traders are actively using stablecoins to move funds, hedge against volatility, and participate in decentralized finance (DeFi) protocols, which rely heavily on stablecoin liquidity.

This positive trend in the stablecoin market is occurring alongside broader improvements in the digital asset space, including increasing institutional interest and a more favorable regulatory outlook in some jurisdictions.

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⚠️ Security & Incidents

This trend highlights a key characteristic of crypto security breaches: a small number of high-impact incidents often account for the majority of the total financial losses.

Despite these large-scale losses, the number of successful hacks and exploits is reportedly on a mild month-over-month downtrend. This suggests that while attacks are becoming more costly, they are not necessarily becoming more frequent.

The nature of the major attacks—a phishing scam and a hot wallet breach—underscores the importance of fundamental security practices. To mitigate future losses, both individuals and platforms are advised to:

• Tighten Credential Hygiene: Use strong, unique passwords for all accounts. Implement and enforce two-factor authentication (2FA) using authenticator apps or hardware tokens, which are more secure than SMS-based 2FA.

• Use Allowlists (Whitelists): For transactions and withdrawals, use allowlists to restrict where funds can be sent. This prevents an attacker from immediately moving stolen funds to an unauthorized address.

• Monitor Approval-Drain Patterns: Be vigilant for suspicious "approval-drain" activities, which involve a malicious smart contract gaining a user's permission to spend their tokens without their explicit consent for each transaction. Tools and services that monitor and revoke these approvals can be invaluable.

 💸 RWAs / Tokenized Treasuries (Institutional & Muni Angle)

The market for tokenized U.S. Treasuries reached a fresh all-time high of approximately $7.45 billion on August 27, 2025. This milestone highlights the growing adoption of on-chain cash management solutions by institutions and municipalities.

The Rise of Tokenized Treasuries

Tokenized U.S. Treasuries are digital representations of traditional government bonds and bills on a blockchain. This process, known as asset tokenization, brings the benefits of blockchain technology—such as 24/7 trading, faster settlement, and increased transparency—to a historically illiquid and inaccessible asset class.

For institutions and municipalities, these products offer a new way to manage their cash reserves. Key benefits include:

• Yield Generation: Instead of holding non-interest-bearing cash, these entities can hold tokenized treasuries and earn a yield, as the tokens represent a share of an underlying fund that invests in U.S. government debt.

• On-Chain Utility: The tokens can be used as programmable collateral within decentralized finance (DeFi) protocols, enabling new use cases for liquidity and lending.

• Operational Efficiency: The use of smart contracts can automate many of the manual processes associated with traditional bond management, reducing costs and operational risks.

• Accessibility and Transparency: Tokenization can lower the barrier to entry by allowing for fractional ownership and providing a transparent, immutable record of transactions on a public ledger.

Leading players in this space include traditional financial institutions like BlackRock with their BUIDL fund and crypto-native firms like Ondo Finance and Superstate. The growth in this sector is a clear sign that the convergence of traditional finance and blockchain technology is accelerating, with real-world assets (RWAs) becoming a central narrative in the digital asset space.

📆 Macro Calendar (Market-Moving)

Thu, Sep 11 – 8:30am ET: August 2025 U.S. Consumer Price Index Report (CPI):

This report is a critical economic indicator that measures the average change over time in the prices paid by urban consumers for a basket of consumer goods and services.

The results will be closely watched by investors, policymakers, and the public to gauge the current state of inflation and its potential impact on the economy. The data will be a key factor in the Federal Reserve's upcoming monetary policy decisions.

Tue–Wed, Sep 16–17: FOMC meeting & press conference (Sep 17):

The Federal Open Market Committee (FOMC) is scheduled to hold a meeting on Tuesday, September 16, and Wednesday, September 17, 2025. A press conference with the Chair of the Federal Reserve is scheduled for Wednesday, September 17.

The FOMC is the monetary policymaking body of the Federal Reserve System. Its primary role is to set the federal funds rate, which influences a wide range of interest rates throughout the economy, from mortgages to business loans. The FOMC's decisions are aimed at achieving its dual mandate of maximum employment and stable prices (low inflation).

This particular meeting is especially important as it is one of the four meetings a year that includes the release of the Summary of Economic Projections (SEP). The SEP provides a summary of the FOMC members' projections for key economic variables, including:

• Gross Domestic Product (GDP) growth

• Unemployment rate

• Inflation (PCE and Core PCE)

• Federal funds rate (the "dot plot")

These projections offer valuable insight into the FOMC's collective outlook for the economy and their expected future path for monetary policy. Investors and market participants will be paying close attention to any changes in the FOMC's statement, the SEP, and the Chair's press conference for clues on the future direction of interest rates.

🔭 RFS Views — Signals & Safeguards

• Tactical: Respect BTC momentum > $110K; avoid chasing without confirmation from persistent ETF inflows.

• Strategic: Favor protocols with clear revenues, L2/L3 roadmaps, and risk-attenuation primitives (oracle diversity, liquidity backstops, incident playbooks).

• Stablecoin stacks: Diversify issuer/custody/chain exposure; treat synthetic dollars (e.g., yield-bearing stables) as credit with scenario testing.

🙇🏾‍♀️ Camryn’s Corner

Welcome to another segment of ‘Camryn’s Corner’ brought to you by your co-author and editor! Each week I will highlight my top 5 DeFi Applications, Protocols, or other news worthy subjects in the crypto and DeFi world. This week I will be providing a highlight of the crypto market this week.

Crypto Market Week in Review: September 5, 2025

The digital asset market enters the new month on a constructive note, with a mix of regulatory clarity and signs of growing institutional adoption shaping the landscape.

Regulatory Progress and Institutional Adoption:

• U.S. Regulatory Clarity: In a notable show of collaboration, the CFTC and SEC issued a joint statement clarifying that registered exchanges are not barred from listing certain spot crypto commodity products. This move, a result of the SEC’s “Project Crypto” and the CFTC’s “Crypto Sprint,” is a significant step toward providing a clearer regulatory path for U.S. exchanges and could increase venue optionality for market participants. The agencies are also scheduled to co-host a roundtable on September 29 to discuss further regulatory harmonization.

• Tokenization Milestones: The tokenization of real-world assets continues to gain momentum, with tokenized U.S. Treasuries reaching a fresh all-time high of approximately $7.45 billion. This trend highlights the growing use of on-chain solutions by institutions and municipalities for cash management, leveraging the benefits of blockchain for traditional financial products.

• Bitcoin ETF Inflows Resume: After a period of outflows in August, Bitcoin spot ETFs have seen a dramatic reversal, with BlackRock's Bitcoin ETF recording a significant inflow of nearly $290 million on a single day this week. This signals a renewed wave of institutional interest and reinforces the "digital gold" narrative for Bitcoin.

Market Performance and Security:

• Stablecoin Market Cap Nears All-Time Highs: The total market capitalization of stablecoins is approaching record levels, ranging between $280 billion and $296 billion. This growth, coupled with strong trading volumes reported in August, indicates improving liquidity and a steady flow of capital into the digital asset ecosystem.

• High-Value Crypto Losses: While the frequency of hacks has seen a mild downtrend, the financial impact remains high, with roughly $163 million in losses reported for August. The majority of these losses were due to two major incidents: a large-scale phishing scam and a centralized exchange hot-wallet breach. This serves as a critical reminder for both individuals and firms to reinforce their security protocols, including credential hygiene and smart contract approval management.

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RFS DeFi Risk Intelligence Weekly

🔓Disclaimer: This Weekly is strictly informational—not investment or legal advice. RFS Consulting emphasizes governance, model validation, and data integrity in its risk assessment framework.