In Russia, Pavel Durov was charged with aiding terrorism; users of Coldcard wallets lost at least 4,585 BTC; the Federal Reserve left rates unchanged; and other events of the week.
Bitcoin retraces to $63,000
With no new strikes between the U.S. and Iran, the first cryptocurrency started the week climbing to levels above $65,000.
However, persistent uncertainty in the Middle East and generally weak demand were among the headwinds that halted the move higher. On July 29, the U.S. Federal Reserve kept the key rate in a 3.5–3.75% range. The cryptocurrency showed little reaction and continued to trade around $64,000.
Late in the week, the price slipped below $63,000. At the same time, South Korean stocks rebounded sharply after a sell-off. In addition to a likely reallocation of capital, crypto market weakness may have been influenced by Strategy’s quarterly report, in which the company said it would continue selling bitcoin, and reports of thefts from Coldcard hardware wallets.
Over the week, bitcoin fell 2.2% and is trading near $63,000. Most top-10 altcoins by market capitalization posted comparable weekly declines. The Hyperliquid token continued to correct after its May–June rally, losing about 12%, but HYPE remains up more than 100% year to date. Dogecoin dropped almost 4%.
Spot bitcoin ETFs recorded $61.5 million in net outflows for the week — inflows had slowed over the previous two weeks before turning negative. They remained in the green until Friday’s final trading session, when investors pulled more than $265 million.
Ethereum funds stayed positive, with $27.4 billion in inflows. However, that was the smallest weekly intake in four weeks.
The crypto Fear and Greed Index predictably remains in the “fear” zone at 27.
Total market capitalization declined from $2.21 trillion to $2.17 trillion. Bitcoin’s dominance held at 58.5%, while Ethereum’s share remained at 10.3%.
Russia charges Pavel Durov with aiding terrorism
Russia’s FSB charged Telegram founder Pavel Durov with aiding terrorism.
According to law enforcement, the messenger’s administration refused to remove channels and bots allegedly used by Ukrainian special services to prepare attacks in Russia.
Among the resources mentioned, the FSB named the dating service “Leonardo Daivinchik.”
The agency says that since July 2025, together with the Interior Ministry and the Investigative Committee, it has detained 46 Russians aged 12 to 22 across 16 regions.
Under Part 1.1 of Article 205.1 of the Russian Criminal Code brought against Pavel Durov, the penalty ranges from 8 to 15 years in prison with a fine, or life imprisonment.
A day after the FSB’s statement, Rosfinmonitoring added the entrepreneur to its list of terrorists and extremists.
Back in February, reported Rossiyskaya Gazeta and Komsomolskaya Pravda, an investigation was launched in Russia into Durov for aiding terrorist activity. At the time, they wrote that since 2022 more than 153,000 crimes had been committed using Telegram.
The founder of VKontakte and Telegram left Russia in 2014 and holds passports from four countries: Russia, France, the UAE, and Saint Kitts and Nevis.
What to discuss with friends?
- Musk said loss of control over AI is possible within ten years.
- Claude chats with crypto wallet keys were found in Google search results.
- An expert called bitcoin a “canary in the coal mine” for the quantum threat.
- WSJ: major chatbots gave detailed answers to bioweapon queries.
$89M in bitcoin stolen from Coldcard wallet owners
Overnight on July 31, about 500 Coldcard hardware wallet owners saw 594.48 BTC (~$38.2 million) stolen. Analysts at Lookonchain flagged the incident.
Galaxy Research specialists found that attacks on users continued. After a third wave, as of Sunday, losses totaled 1,367 BTC (~$89 million), and the number of affected addresses reached 4,585.
Coinkite — the developer of Coldcard — said in a blog post that the vulnerability is related to wallet firmware.
The issue is present in all Mk3 firmware versions starting from 4.0.1. It also affects seed phrases generated on Mk4 and Mk5 prior to version 5.6.0 and on Q prior to version 1.5.0Q.
The team recommended that hardware wallet owners update their software as soon as possible and launched an investigation.
Coinkite CEO Rodolfo Novak apologized to users and took “full responsibility for the firmware bug.” He suggested the hacker might have found the vulnerability using AI, calling the incident “the harsh reality of the new AI paradigm.”
AmericanFortress proposes wallet protection scheme against quantum threats
AmericanFortress published a preprint of ZKPoSP — a cryptographic scheme to protect hierarchically deterministic wallets from potential quantum attacks without changing addresses.
According to the authors, ZKPoSP retains the existing address format but replaces the classical signature with a non-interactive zero-knowledge proof (NIZK).
AmericanFortress also described the QBIP32 scheme. It should generate a signing scalar, a separate quantum-resistant proof, and a chain code in a single function call. The authors claim QBIP32 can be applied to various prime-order elliptic curves, including secp256k1 and Ed25519.
Also on ForkLog:
- Aave proposed closing 50 reserves totaling nearly $100 million.
- IBM found a way to verify quantum computing results without supercomputers.
- Researchers caught AI models bypassing cyber test rules.
- Anthropic acknowledged three real-system breaches in Claude tests.
Stablecoin market sees first significant contraction in four years
On July 28, according to DeFiLlama, total stablecoin market capitalization fell by more than $10 billion from the May peak to about $310 billion. The outflow was the largest monthly drop since Terra’s collapse in May 2022.
Against this backdrop, adjusted transaction volume for June 2026 hit an all-time high of $1.79 trillion, up about 63% month over month.
A key driver of the divergence between falling capitalization and rising volumes was the GENIUS Act adopted in July 2025. It banned issuers from paying interest on payment stablecoins.
David Krause, a finance professor at Marquette University, described the mechanics:
“The wrinkle is that the ban did not eliminate the underlying demand for yield — it merely moved it. Investors who need a digital dollar with yield near U.S. Treasury bill rates simply found other products with the legal right to offer it.”
According to him, tokenized Treasury funds, DeFi lending protocols, and offshore stablecoin issuers are ready to absorb the demand. A treasurer parks idle dollars in a tokenized fund paying 4% and holds stablecoins only for the time needed to make the actual payment. Capital flows out of the asset while working balances remain and turn over faster, which shows up as falling supply amid record volumes.
What else to read?
We explained in new Cryptorium cards what tokenized ETFs are and how they differ from perp-ETFs.
We examined when a DeFi front end can be regulated as a standalone product and strategies to mitigate related risks.
We explained why MiCA, conceived as a “gold standard” for regulation, turned into bureaucratic chaos — and how European authorities are trying to fix it.
We compiled the week’s most notable security developments in our regular digest.
