Pavel Durov, the founder of Telegram, has been accused of aiding terrorism in Russia. Additionally, users of Coldcard wallets experienced the theft of at least 4,585 BTC, while the Federal Reserve kept interest rates unchanged and other significant events unfolded this past week.

Bitcoin Dips to $63,000

Amid a lack of new tensions between the U.S. and Iran, Bitcoin began the week positively, climbing above $65,000. However, ongoing uncertainty in the Middle East and generally weak demand hindered further gains. On July 29, the U.S. Federal Reserve (Fed) maintained its key interest rate at 3.5-3.75%. Bitcoin showed little reaction to this decision, trading around $64,000.

Hourly BTC/USD chart from Binance. Data: TradingView.

By the end of the week, Bitcoin's price fell below $63,000. Concurrently, South Korean stocks rebounded sharply after a sell-off. The potential capital flight due to the weak crypto market may have been influenced by Strategy's quarterly report, which indicated plans to continue selling Bitcoin, as well as reports of thefts from Coldcard hardware wallets.

Over the week, Bitcoin's value decreased by 2.2%, settling at around $63,000. Most altcoins in the top 10 by market capitalization experienced similar declines throughout the week. The Hyperliquid token continued its correction after a rally in May and June, losing approximately 12%, although HYPE has still seen over 100% growth since the start of the year. Dogecoin fell by nearly 4%.

Source: CoinMarketCap.

Spot Bitcoin ETFs saw outflows of $61.5 million over the week, with inflows declining significantly in the past two weeks before turning negative. Prior to the last trading session on Friday, inflows had remained positive, but investors withdrew over $265 million by the end of the session.

Source: SoSoValue.

Ethereum funds maintained a positive trend with an inflow of $27.4 billion, although this marked the lowest inflow in four weeks.

Source: SoSoValue.

The cryptocurrency fear and greed index remains predictably in the "fear" zone at 27 points.

Source: Alternative.me.

The total market capitalization decreased from $2.21 trillion to $2.17 trillion. Bitcoin's dominance remained at 58.5%, while Ethereum's share stayed at 10.3%.

Durov Faces Terrorism Charges in Russia

The Russian Federal Security Service (FSB) has charged Pavel Durov with aiding terrorism.

According to the authorities, the messaging platform's administration refused to remove channels and bots allegedly used by Ukrainian special services to prepare terrorist acts within Russia.

The FSB mentioned a dating service called "Leonardo DaVinchi" among the resources cited.

Since July 2025, the agency claims that 46 Russians aged 12 to 22 have been detained across 16 regions in collaboration with the Ministry of Internal Affairs and the Investigative Committee.

Under the first part of Article 205.1 of the Russian Criminal Code, the charges against Durov carry a penalty of 8 to 15 years in prison or life imprisonment.

Just a day after the FSB's statement, Russia's Financial Monitoring Service added Durov to its list of terrorists and extremists.

Reports from February indicated that an investigation had been opened against Durov regarding his alleged support for terrorist activities, with claims that more than 153,000 crimes had been committed using Telegram since 2022.

Durov, who left Russia in 2014, holds passports from four countries: Russia, France, the UAE, and Saint Kitts and Nevis.

Discussion Topics with Friends

  • Musk suggested a potential loss of control over AI within ten years.
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  • An expert labeled Bitcoin as a "canary in the coal mine" for quantum threats.
  • WSJ: Major chatbots provided detailed answers on bioweapons queries.

$89 Million in Bitcoin Stolen from Coldcard Wallet Owners

On the night of July 31, approximately 500 owners of Coldcard hardware wallets reported the theft of 594.48 BTC (around $38.2 million). Analysts at Lookonchain highlighted this incident.

Galaxy Research found that attacks on users continued, resulting in a total loss of 1,367 BTC (approximately $89 million) by Sunday, with affected addresses reaching 4,585 BTC.

https://twitter.com/glxyresearch/status/2083623500183421043

Coinkite, the developer of Coldcard, acknowledged in a blog post that the vulnerability was linked to the wallets' firmware.

This issue affects all versions of firmware Mk3 starting from 4.0.1, as well as seed phrases generated on Mk4 and Mk5 up to version 5.6.0 and on Q up to version 1.5.0Q.

The team advised hardware device owners to update their software promptly and has initiated an investigation.

Rodolfo Novak, CEO of Coinkite, apologized to users and took "full responsibility for the firmware error." He suggested that the hacker might have exploited the vulnerability using AI, describing the incident as a "harsh reality of the new AI paradigm."

AmericanFortress Proposes Quantum Threat Protection for Crypto Wallets

AmericanFortress has released a preprint on ZKPoSP, a cryptographic scheme designed to safeguard hierarchically deterministic wallets against potential quantum attacks without changing addresses.

The authors propose that ZKPoSP allows the preservation of existing address formats while substituting traditional signatures with non-interactive zero-knowledge proofs (NIZK).

AmericanFortress also outlined a scheme called QBIP32, which is intended to generate a signing scalar, a separate quantum-resistant proof, and a chain code within a single function call. They claim that QBIP32 can be applied to various elliptic curves of prime order, including secp256k1 and Ed25519.

Also on ForkLog:

  • Aave proposed to close 50 reserves totaling nearly $100 million.
  • IBM has learned to verify quantum computing results without supercomputers.
  • Researchers caught AI models bypassing cyber testing rules.
  • Anthropic confirmed three breaches of real systems during Claude tests.

Stablecoin Market Shrinks for the First Time in Four Years

As of July 28, according to DeFiLlama, the total market capitalization of stablecoins fell by over $10 billion from its peak in May, now standing at around $310 billion. This outflow represents the largest monthly decline since the Terra crash in May 2022.

In contrast, adjusted transaction volumes for June 2026 hit a historical high of $1.79 trillion, reflecting a month-on-month increase of about 63%.

The key factor behind the disconnect between declining capitalization and rising volumes was the passing of the GENIUS Act in July 2025, which prohibited issuers from paying interest on payment stablecoins.

David Krause, a finance professor at Marquette University, described this mechanism:

"The complexity lies in the fact that the ban did not destroy the underlying demand for yield — it merely shifted it. Investors seeking a digital dollar with yields comparable to U.S. Treasury bills simply found other products that have the legal right to offer it."

According to him, tokenized treasury bond funds, DeFi lending protocols, and offshore stablecoin issuers are poised to meet this demand. The treasury invests idle dollars in a tokenized fund that pays 4%, holding stablecoins only as long as necessary for actual payments. Capital leaves the asset while working balances remain and turn over faster, contributing to the supply drop amid record volumes.

Further Reading:

New cards from "Cryptorium" explain what tokenized ETFs are and how they differ from perp-ETFs.

They examined when a DeFi frontend might be regulated as a standalone product, along with strategies for mitigating associated risks.

They also analyzed why MiCA, intended as the "gold standard" of regulation, devolved into bureaucratic chaos and how European authorities are attempting to rectify the situation.

Lastly, they compiled the most notable security events of the week in a traditional digest.