Term Finance, a decentralized lending protocol, lost an estimated $8.5 million after an attacker gained governance control of its vault contracts and drained assets.

Term Labs announced that it has permanently disabled all Term Meta Vaults and revoked their DAO governance roles, halting new deposits while allowing withdrawals.

The company said its underlying protocol and borrowing and lending markets remain intact, though verification of the full impact continues.

On‑chain monitoring service Defimon reported that the attacker acquired a majority of the sparsely held governance token and submitted proposals that transferred control of the vaults.

Term has not confirmed how voting control was achieved or which governance functions were used.

The vault contracts use Yearn V3 infrastructure, and Yearn said the attack involved a custom governance wrapper that does not affect standard Yearn vaults.

The incident follows an April 2025 oracle error that triggered unintended liquidations, which Term mitigated by recovering assets and reimbursing users.

After the incident, Term pledged third‑party validation for critical updates and greater governance transparency.

Term said it is coordinating with external security teams to pursue asset recovery and explore remedies for any remaining shortfall.

Kalshi has blocked customers in Washington while awaiting a King County judge’s decision on September 2 on a request to reconsider an injunction that bars the firm from offering prediction‑market contracts in the state. Washington requires Kalshi to install IP‑address and residency‑based controls for seven event‑contract categories and to operate a GeoComply location system by September 2, or face a daily penalty of $120,000. The amended preliminary injunction, issued after a prior jurisdiction challenge was rejected, covers contracts linked to sports, elections, politics, entertainment, culture, technology and science, as well as certain “mentions” markets. Kalshi’s counsel argues that the state’s treatment of OG, a federally regulated competitor, is inconsistent and that the agreement with Washington officials should allow the firm to resume trading. The company told the court it has already blocked Washington residents and that the injunction’s requirements exceed those imposed on OG. Judge John McHale is scheduled to hear the reconsideration request without oral argument. Michigan and Nevada have also ordered location controls while state authorities pursue claims that Kalshi’s products constitute unlicensed gambling. CFTC Chairman Michael Selig said the agency will continue defending its claim of exclusive jurisdiction over federally regulated event contracts and will soon propose amendments to Parts 38 and 40 of its regulations to address consumer protection and market governance. The proposed rule changes are expected to outline standards for contracts involving gaming, war, terrorism, assassination or illegal activity, but they remain subject to the federal rulemaking process and do not automatically affect state court orders. The next immediate milestones are the September 2 court decision and the September 2 geofencing deadline; until a court grants relief, Washington customers cannot access the restricted markets.

BitMart announced on Aug. 21 that it was exploring a restructuring plan involving creditor distributions and a phased restart of selected operations. The plan would combine a structured resumption of certain services with payments to creditors, the company said. The proposal remains subject to legal, financial, operational and regulatory review and has not been approved. White & Case was appointed as restructuring counsel and will evaluate options with BitMart’s advisers. The exchange set a trading cutoff for all spot, futures and other markets at 01:00 UTC on Aug. 26, unless revised. Futures accounts have entered reduce‑only mode and spot markets have halted new orders. New registrations and deposits closed on July 26. Withdrawals remain open, though additional identity, sanctions and transaction checks may delay processing. BitMart has not disclosed creditor eligibility criteria, payout percentages, reserve levels or a court filing. The token BMX traded near $0.06, having fallen about 80 percent over the previous month. The next public update is scheduled for Sept. 9 and will address which operations might restart, the legal entities that would manage creditor claims and how claims will be valued. Until that update, trading will remain suspended on Aug. 26 and the platform is scheduled to close on Jan. 31, 2027. The phased restart and creditor distributions are possible components of the plan rather than confirmed outcomes.

U.S.-listed cryptocurrency exchange‑traded funds excluding Bitcoin and Ethereum recorded almost $90 million in net inflows for the week ended August 21, as XRP, Solana, Chainlink and Hyperliquid products posted price gains. The inflows followed a broader market rally that lifted Bitcoin and Ethereum ETFs by $2.61 billion, the strongest weekly totals since October 2025. XRP products led with $39.78 million of net inflows, the largest weekly amount since the week ended May 15, according to SoSoValue. Solana funds added $28.34 million, marking the eighth consecutive positive week and the largest inflow since mid‑May, the data also showed. Chainlink attracted $13.35 million, its strongest weekly inflow since the product’s launch, while Hyperliquid received $3.89 million for a third straight week of gains. Combined, the altcoin ETFs represented a small share of the $2.61 billion total inflows into Bitcoin and Ethereum products, but the sustained weekly inflows indicated expanding institutional participation. XRP’s price rose about 50 % from below $1 to a high of $1.60 before slipping to $1.49, according to market data. Solana climbed about 24 % and briefly traded above $100 before retreating to around $93. Chainlink’s token price increased 22 % to $12 before easing to $11.40. Hyperliquid’s token peaked near $82 during the week and fell to $79. Additional modest inflows were recorded for Avalanche ($1.3 million), Hedera ($848,000) and Dogecoin ($654,416). Overall weekly trading volume for the altcoin ETFs reached $271.74 million, the highest on record. The data showed continued inflows and price gains, indicating expanding participation in altcoin ETFs, while the volume remained far below the capital absorbed by Bitcoin and Ethereum products.

Tether CEO Paolo Ardoino said on August 23 that USDT adoption is growing in Venezuela, Argentina, Bolivia and Turkey amid monetary instability. USDT is a stablecoin pegged to the U.S. dollar, allowing users to hold digital dollar exposure without a bank account. Its use has expanded in regions where local currencies have weakened or physical dollars are scarce. Chainalysis ranked Venezuela 18th, Turkey 14th and Argentina 20th in its 2025 Global Crypto Adoption Index based on transaction volume and user activity. The firm measured nearly $1.5 trillion in Latin American crypto activity between July 2022 and June 2025, with Argentina accounting for an estimated $93.9 billion, Venezuela $44.6 billion and Bolivia $14.8 billion. In Venezuela, businesses have reported using USDT for retail payments and some import‑export settlements alongside the bolivar and physical dollars. Bolivia’s central bank publishes a reference USDT exchange rate based on peer‑to‑peer activity on Binance, showing the stablecoin trading at a premium to the official dollar rate. The central bank’s January financial stability report noted foreign currency restrictions, high inflation and low reserves as ongoing risks. The government has not yet established a legal framework that makes USDT legal tender, so its formal payment status remains forward‑looking. Argentina has experienced high inflation, with consumer prices falling from 49.4% in September 2024 to 30.9% in December 2025 according to an IMF review, which projected inflation of 23% by the end of 2026. The IMF also reported monthly inflation of 3.4% in March 2026 after peso depreciation and weaker demand. Tether reported that its platform served more than 570 million users worldwide as of March 2026, and its USDT supply reached a record $188 billion in 2026, making it the largest dollar‑denominated stablecoin. Users continue to face risks related to issuer solvency, regulatory changes, wallet compatibility and network conditions. Whether USDT will become a mainstream component of national payment systems in these economies remains to be seen.

Treasury Secretary Scott Bessent announced on Aug. 19 that the maximum size of Treasury bond buyback operations for 10‑, 20‑ and 30‑year maturities would be increased to at least $4 billion, up from a $2 billion limit. The announcement came as 30‑year Treasury yields remained near 5.25%, a level not seen since 2007.

The Treasury’s bond‑buyback program is intended to provide liquidity at the long end of the curve and to temper rising borrowing costs that have been driven by a $40 trillion national debt and persistent inflation concerns. Analysts said the move signaled policy unease about long‑duration yields but did not directly lower yields.

Bitcoin climbed to nearly $80,000, triggering billions of dollars in short‑position liquidations across the broader crypto market. Gold also rallied, as investors rotated into scarce assets perceived as hedges against currency debasement. Fabian Dori, chief investment officer at Sygnum, said the Treasury’s action reflected “real unease about rising yields” and revived expectations of further liquidity‑easing measures. Ole Hansen of Saxo Bank noted that higher oil prices and Middle East tensions added to inflation worries, keeping yields elevated.

The effectiveness of the $4 billion buyback program remains uncertain, given the scale of fiscal deficits and the size of the bond market. Whether elevated yields will continue to limit gains in Bitcoin and gold is an open question as markets watch for additional policy responses.

Pakistan’s Virtual Assets Regulatory Authority (PVARA) opened its licensing portal, requiring virtual asset service providers that began operations on or before March 5 to submit a no‑objection certificate (NOC) by September 5 or stop operating. The portal’s launch follows the Virtual Assets Act passed in March, which created PVARA as the statutory regulator and allowed banks to hold accounts for licensed providers. PVARA previously issued NOCs to firms such as Binance and HTX in December 2025. The regulations cover exchanges, custody, broker‑dealer services, lending, derivatives, asset management, token issuance and mining‑related activities. Licensees must keep customer holdings separate from their own assets and may not pledge or lend them without written consent. They must also meet governance, market conduct, cybersecurity, operational resilience and anti‑money‑laundering and counter‑terrorism financing standards. Firms may obtain an NOC before incorporating locally or enter a regulatory sandbox to test products under PVARA supervision before applying for a full license. The licensing framework offers two pathways: a sandbox route for product testing and an NOC route for companies preparing to incorporate in Pakistan. The deadline of September 5 gives firms a limited window to comply, and it remains unclear how many will submit applications before the cutoff.

ZK International announced on July 30 that it received 205,512.5 AWA tokens to settle a $20.02 million equity‑financing receivable, leaving the company with less than $83,000 in cash and cash equivalents. The firm, which operates a pipeline‑monitoring components resale business, reported $82,696 in cash and cash equivalents as of March 31, representing about 0.12% of its $66.44 million total assets. The AWA tokens, a non‑mainstream cryptocurrency not listed on major exchanges, remained unmonetized and their fair value at the receipt date was undetermined. The company recorded the receivable at the $20.02 million transaction price rather than the tokens it held. Its continuing operations held $82,696 in cash, while $62.59 million, or 94.2%, of total assets were tied up in a $21.57 million prepayment for AI equipment, the $20.02 million digital‑asset consideration receivable, and a $21 million receivable from the sale of eight subsidiaries. Management noted that these assets were distinct from cash or immediately available liquid resources. The firm reported a $17.02 million consolidated net loss for the six months through March and an accumulated deficit of $68.28 million, leading to a conclusion of substantial doubt about its ability to continue as a going concern. Plans to expand the resale business, obtain additional financing, and launch AI computing services were outlined as part of a liquidity strategy for the next 12 months. The $20 million disposal consideration remained a receivable at March 31, and the AI‑equipment prepayment was still outstanding. The filing identified the token buyers only as certain non‑U.S. investors and did not provide a list of purchasers. The token delivery settled the contractual receivable but did not generate cash or resolve the valuation question, and the company’s liquidity remains dependent on asset collection, financing access, and working‑capital management.

Vincent Maliepaard, VP of Marketing at Sentora, said tokenized funds are no longer a novelty. Tokenized US Treasury funds now hold roughly $16 billion in distributed value, according to the report. Most tokenized funds are held, occasionally transferred, and eventually redeemed, providing faster distribution and settlement but leaving the underlying asset economically idle. The typical workflow involves holding the token, transferring it, and redeeming it for cash, which improves liquidity while the asset remains unused. An alternative approach deposits the token into a lending market as collateral to borrow stablecoins, allowing the investor to retain exposure and yield while receiving cash without selling the asset. In this model the asset’s function changes rather than its identity. Because the underlying assets trade during market hours and may have periodic net asset values, they differ from assets that trade continuously on decentralized exchanges, such as ETH. DeFi protocols liquidate positions within minutes, whereas traditional settlement can take days, creating a timing gap that must be addressed in the token design. mWIN, launched in August 2026, serves as a case study. Issued natively onchain by Midas, the token represents a portfolio of investment‑grade CLOs and other credit assets with a current yield of about 6.9 %. Wellington Management manages the credit strategy and Northern Trust holds the assets. The token can be minted and redeemed daily on a T+1 basis, drawing liquidity from multiple sources. Sentora curates a Morpho market in which mWIN backs loans in PayPal’s PYUSD. The market parameters are set based on historical net asset value data, stress‑event analysis, and liquidity assessments, establishing loan‑to‑value limits that reduce the risk of forced sales. The practical result is that an asset designed for distribution and an asset designed for collateral should meet different standards. Industry metrics currently track the total value of assets issued onchain, a measure that does not reflect active use. Other indicators include the amount of tokenized collateral securing loans, the stablecoin liquidity raised against tokenized securities, and the volume of collateral moving between platforms without selling the underlying asset. Recent developments show growing activity: Figure PRIME’s Morpho markets surpassed $200 million in growth this year, and Aave’s Horizon product, launched in August 2025, now holds over $250 million in total value locked as institutions borrow stablecoins against tokenized assets. Digitizing documents alone did not transform the internet; networked documents did. Similarly, financial assets are moving from mere representation to distribution and now to utility, with the ultimate value of tokenization measured by the functionality that can be built on these assets.