RFS DeFi Risk Intelligence Weekly

Welcome to another edition of RFS DeFi Risk Intelligence Weekly!

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📰 Crypto News Highlights

The CFTC clarifies FBOT framework

The Commodity Futures Trading Commission (CFTC) issued an advisory on August 28, 2025, clarifying its Foreign Board of Trade (FBOT) framework to allow offshore crypto exchanges to serve U.S. customers legally, a significant reversal from recent enforcement-driven policies. The guidance provides a clear path for these foreign platforms to register as FBOTs rather than Designated Contract Markets (DCMs), ensuring U.S. traders have greater access to global crypto markets under CFTC oversight and supervision

Markets cautious: BTC near $111,965, ETH around $4,480, with liquidity steady but ETF flows softening

As of late August 2025, the cryptocurrency market shows mixed signals, with Ethereum gaining institutional traction despite broader market dips and softening ETF flows for Bitcoin. The shift in sentiment has led to significant price divergence between the two largest cryptocurrencies. 

Bitcoin (BTC)

• Price level: In late August 2025, Bitcoin was trading near the $111,965 mark but had seen recent volatility. On August 29, the price experienced a sharp decline, briefly dropping below $110,000.

• ETF flows: Spot Bitcoin ETFs saw a net outflow of over $800 million in August, marking one of the highest monthly outflows on record. This reflects a slowdown in institutional demand for Bitcoin compared to earlier in the year.

Ethereum (ETH)

• Price level: Ethereum's price has been notably resilient, trading around $4,480 in late August 2025. It achieved a new all-time high of $4,945 on August 25, followed by a slight correction.

• ETF flows: Spot Ethereum ETFs have seen strong institutional interest, with billions in inflows since their launch in July. This momentum contrasts sharply with the recent outflows seen in Bitcoin ETFs.

Stablecoin supply stable, USDC regaining share from USDT

While Tether (USDT) maintains its lead in total market capitalization, USD Coin (USDC) is steadily regaining market share through its focus on regulatory compliance and transparency. This shift is occurring as the total stablecoin supply remains relatively stable, with growth fueled by greater institutional adoption and clearer regulations. 

Key Market Trends 2025: USDC

• Institutional trust: USDC is gaining ground due to its transparency and regulatory alignment, appealing to institutional investors and traditional finance players. Issuer Circle's IPO pursuit further enhances its legitimacy in traditional financial markets.

• Cross-border payments: USDC is expanding its footprint in global payment systems, exemplified by a partnership with financial technology firm Finastra to enable cross-border transactions for bank

Key Market Trends 2025: USDT

• Strong liquidity: Tether maintains a high trading volume and widespread presence across exchanges and DeFi platforms, cementing its status as a preferred choice for trading.

• Off-exchange usage: While USDC gains on centralized exchanges, USDT's strength remains in its off-exchange uses, including cross-border payments. 

RFS Risk View: Offshore access clarity raises liquidity potential but jurisdictional and counterparty risks remain high

We see this trend in finance where clearer regulations for offshore financial activities increase investment and capital flow, but significant risks tied to international law and partner reliability persist.

This dynamic is currently relevant in the cryptocurrency sector, where recent regulatory clarification has defined a pathway for offshore crypto exchanges to serve U.S. traders. This also applies to other forms of offshore business activity, from traditional banking to outsourcing.

Clarity on regulations: Recent regulatory advisories from bodies like the U.S. Commodity Futures Trading Commission (CFTC) provide clearer rules for offshore entities. This reduces legal uncertainty for both the offshore platforms and domestic traders, which encourages greater participation

Access to global markets: The opening of offshore access allows domestic investors and companies to tap into a wider array of international markets and a larger pool of global capital. 

Jurisdictional risks: These are the legal and political uncertainties associated with operating in different countries

Counterparty risks: These are the risks that a business partner, trading platform, or other entity will fail to meet its contractual obligations.

To read more about how to manage risk in off-shore market activity:

💵 Stablecoin Monitor Snapshot

• Supply shifts: USDC reclaiming share from USDT.

• Depeg risks: Minimal, max intraday ±0.15%.

• Issuer Watch: Circle expanding banking partnerships; Tether stable, low comms.

🌊 On-Chain Liquidity & Flows

📈 ETF & TradFi Flows

Based on recent trends and market data, the ETF and TradFi flows point to a notable rotation of institutional capital away from Bitcoin and toward Ethereum, while overall market leverage has recently been reduced

BTC Spot ETFs: ~$230M net outflows (5-day)

• Indicates capital rotation: The net outflows from Bitcoin ETFs signal that institutional and large-scale investors are reallocating capital away from Bitcoin. This is not an exit from the crypto space but a strategic shift to other digital assets.

• Reflects profit-taking: Some analysts suggest the outflows are tied to investors locking in gains after a strong price run. The recent outflows followed a significant price correction, indicating repositioning in response to market volatility.

ETH Futures ETFs: +$75M modest inflows

• Signals rising institutional interest: The steady inflows into Ethereum futures ETFs reflect growing institutional confidence in Ethereum as a legitimate and attractive investment. This trend has been particularly strong in recent months.

• Increased legitimacy: These inflows follow the formal approval of spot Ethereum ETFs in the U.S., cementing Ethereum's growing legitimacy within traditional finance.

Funding Rates: Normalized toward neutral, easing earlier leverage buildup

• Suggests easing market leverage: Funding rates are fees paid between traders in perpetual futures contracts to keep futures prices in line with spot prices. A high positive rate indicates an overheated market with excess long-side leverage. As rates normalize, it indicates a reduction in this leverage.

• Indicates stabilization after volatility: Normalized funding rates suggest the market is moving toward a more stable state after a period of high volatility and leveraged trading. This reduces the risk of large, cascading liquidations.

🔦 Asset Spotlights

Bitcoin (BTC)

• Thesis: Institutional anchor & macro hedge.

• RFS Risk Score: 72/100 (robust liquidity, ETF-driven demand).

• Catalysts: ETF rebalancing, Fed policy trajectory.

Ethereum (ETH)

• Thesis: Core settlement layer for tokenized assets.

• RFS Risk Score: 68/100 (scaling questions, but strong L2 traction).

• Catalysts: ETF regulatory updates; L2 ecosystem growth.

Solana (SOL)

• Thesis: High-throughput chain for DeFi & consumer apps.

• RFS Risk Score: 60/100 (strong dev base, but liquidity fragile).

• Catalysts: Ecosystem expansion, validator network resilience.

📊 Macro & Markets

⚠️ Protocol Risk Watch

Aave v3

• TVL: $12B (+2%).

• Risks: LST concentration.

• Mitigations: Caps & active governance.

Curve Finance

• TVL: $4.5B (-4%).

• Risks: Gauge reliance & governance fragmentation.

• Mitigations: DAO reserves, multisig oversight.

🏛️ Policy & Regulation

CFTC Reopens U.S. Access to Global Crypto Markets

• Event: On Aug. 28, the CFTC reaffirmed its Foreign Board of Trade (FBOT) framework, giving non-U.S. exchanges a clear path to register and provide direct access to U.S. traders.

• Institutional Impact: Re-establishes offshore liquidity access under regulatory clarity, expanding participation opportunities.

• RFS Risk Framing:

  • Liquidity vs. Risk: Liquidity access improves, but cross-border compliance and AML oversight are critical.

  • Next to Watch: Which offshore platforms apply first and how U.S. regulators enforce surveillance sharing.

📊 RFS Analytics Modules

🚨 Risk Alerts

• Jurisdictional Risk: Offshore exchanges pursuing FBOT access.

  • Mitigation: Confirm registration & compliance monitoring.

• Liquidity Fragility: Alt L1 volumes declining.

  • Mitigation: Limit exposure, stress-test positions.

📆 Watchlist – Key Dates

Sept 5th: U.S. Jobs Report

Also known as the Emoloyment Situation for August 2025, is scheduled for release on Friday, September 5, 2025, at 8:30 a.m. Eastern Time, according to the Bureau of Labor Statistics. This report provides comprehensive data on employment, unemployment, wages, and hours for the month of August and is a key indicator for the economy. 

Read more about upcoming sentiment in anticipation of the upcoming Jobs Report:

Sept 12th: SEC ETH ETF deadline

While a potential deadline related to Ethereum ETFs was initially rumored for September 12, 2025, it is not a final decision date for the major ETH ETF applications. The key deadline in September relates to a potential "fast-track" approval process for Ethereum ETF rule changes, not the final launch

Sept 15th: Major token unlocks (APT, OP)

In September 2025, Aptos (APT) and Optimism (OP) have regularly scheduled token unlocks as part of their monthly vesting schedules, not specifically on the 15th. Aptos has an unlock scheduled for September 11, while Optimism's next unlock will be on September 30. 

Aptos (APT) unlock

• Date: September 11, 2025

• Amount: 11.31 million APT tokens

• Significance: This unlock accounts for approximately 2.33% of the circulating supply. The vested tokens will be distributed to the community, core contributors, the Aptos Foundation, and investors. Past unlocks have sometimes led to short-term price fluctuations, with one unlock in August 2023 seeing a 23% price drop. 

Optimism (OP) unlock

• Date: September 30, 2025

• Amount: 32.21 million OP tokens

• Significance: This regular monthly release represents about 0.75% of the total supply. The tokens are allocated to core contributors and investors. The impact of these routine unlocks can be less severe than a major cliff event, but they still add to the circulating supply and can influence short-term market dynamics

🙇🏾‍♀️ 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 DeFi Applications, Protocols, or other news worthy subjects in the crypto and DeFi world. This week I will be highlighting the top token launches to watch.

Disclaimer: The crypto market is highly volatile and speculative. The information provided below is for informational purposes only and should not be considered financial advice. All investment decisions should be based on your own research and risk tolerance.

A Look Ahead: Upcoming Tokens to Watch

As the crypto and DeFi landscape continues to evolve at a breakneck pace, staying ahead of the curve means keeping an eye on new projects and tokens poised to make an impact. While established players like Bitcoin and Ethereum remain foundational, 2025 is shaping up to be a year of innovation, with new tokens emerging that target specific use cases and narratives, from AI to real-world asset tokenization. Here are two notable projects and their tokens that are on my radar.

1. The Bitcoin Layer 2 Narrative:

The ongoing narrative around Bitcoin's scalability has paved the way for a new wave of Layer 2 solutions. Bitcoin Hyper is a notable project aiming to give Bitcoin the capabilities of a modern DeFi chain. By leveraging a high-speed infrastructure, it promises fast transaction speeds, low costs, and the ability to support smart contracts. With staking rewards and a focus on maintaining Bitcoin's core ethos, $HYPER is a token that could appeal to those looking for Bitcoin-adjacent utility.

2. The Synthetic Dollar and DeFi: Ethena ($ENA)

Ethena has captured significant attention in the DeFi space with its "internet bond," a synthetic dollar stablecoin ($USDe) designed to be censorship-resistant and on-chain. This innovative approach to a stablecoin-backed staking yield has positioned Ethena as a leader in a new financial primitive. As DeFi seeks more sustainable and resilient forms of yield, $ENA, as the governance token of this protocol, is a project to monitor closely.

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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.