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XRP slides to multi-month lows as liquidations surge amid market rout

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XRP price stalls as ETF flow cools
XRP price stalls as ETF flow cools
  • XRP slid to near $1.5 amid a broad crypto selloff and $2.5 billion in liquidations, before a modest rebound.
  • Heavy liquidations, weak volumes, and bearish indicators keep XRP’s near-term technical outlook fragile.
  • Ripple secured an EU EMI license in Luxembourg, boosting its regulatory footing despite XRP volatility.

XRP slid sharply over the weekend as a broad risk-off move swept through cryptocurrency markets, triggering heavy liquidations and pushing the token to its lowest level since December 2025.

The selloff came alongside steep declines in Bitcoin, Ethereum and even traditional safe havens such as gold and silver, underscoring the depth of the market rout.

The turbulence unfolded even as Ripple, the payments firm closely associated with XRP, secured a key regulatory milestone in Europe after receiving final approval for an Electronic Money Institution license in Luxembourg, strengthening its ability to scale regulated payment services across the European Union.

XRP slides to multi-month lows amid broad market selloff

XRP is attempting to stabilise after a sharp weekend selloff that dragged its price down to around $1.5, as bearish pressure swept through cryptocurrency markets.

After failing to sustain gains near $1.8, the token fell to its lowest level since December 2025.

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The decline came amid a broader market rout that saw Bitcoin slide below $75,000, and Ethereum drop toward $2,100, pulling most major altcoins lower.

The risk-off move extended beyond crypto.

Gold, which had recently climbed above $5,500 an ounce, fell to about $4,620, marking its steepest single-day decline in more than a decade, while silver also posted heavy losses.

Over $2.5 billion liquidated

Selling pressure intensified as the US entered a partial government shutdown, while markets showed little reaction to President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair.

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Warsh is widely viewed as supportive of digital assets.

In crypto markets, more than $2.5 billion in leveraged positions were liquidated on Jan. 31.

According to Coinglass, this ranked as the 10th-largest liquidation event on record, though well below the $19 billion wipeout seen during the October 10, 2025 crash.

On-chain data showed that more than $10 million in XRP positions were liquidated in the past 24 hours, with about $7.4 million of those in long positions.

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CoinGlass data indicated that more than 4,300 traders were affected, while daily volatility in XRP exceeded 7.5%.

Some market participants blamed Binance for exacerbating the selloff, though the exchange and its former chief executive Changpeng Zhao rejected those claims.

Technical outlook remains fragile despite modest rebound

XRP’s market capitalisation has fallen to roughly $97 billion, reflecting a sharp contraction as investors moved away from risk assets.

Daily trading volume declined 16% to around $5.4 billion, signalling weakening liquidity and limited buying interest.

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From a technical perspective, the daily chart remains broadly bearish.

While the relative strength index suggests a potential rebound from oversold levels, weak momentum could limit upside.

The MACD continues to indicate strengthening bearish conditions, with the histogram widening.

As of Monday, February 2, XRP was trading near $1.6, recovering modestly from its weekend lows.

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A sustained break below $1.5 could open the way toward the $1.24 support area.

On the upside, a move back above $1.8 may help stabilise sentiment and allow for a potential retest of the $2.00 to $2.30 range.

Ripple secures EU EMI license in Luxembourg

Ripple has received final approval from Luxembourg’s financial regulator for a full Electronic Money Institution license, converting a preliminary authorization granted in January.

The license, issued by the Commission de Surveillance du Secteur Financier, enables Ripple to scale its blockchain-based payments and digital asset services across the European Union under a regulated framework.

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The approval builds on Ripple’s recent regulatory gains in the UK, where the Financial Conduct Authority granted the firm an EMI license and crypto asset registration, strengthening its European expansion strategy.

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Every 5 Minutes: Korea’s New Rule for Crypto Exchanges

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South Korea’s financial regulator has ordered all crypto exchanges to verify user asset balances every five minutes, following a massive overpayment incident that shook market confidence earlier this year.

One botched reward payout exposed systemic cracks across the entire industry.

What Triggered the Rules

In February, Bithumb accidentally sent 2,000 BTC per person instead of 2,000 Korean won ($1.40) during a promotional event. The error amounted to roughly $42 billion in misallocated crypto. The Financial Services Commission (FSC) launched emergency inspections across all five major Korean exchanges immediately after. What they found went far beyond a single human mistake.

Most exchanges were only reconciling their books once every 24 hours. Three had no automatic kill switch to halt trading when discrepancies appeared. Four lacked multi-step approval systems for high-risk manual transactions. Two exchanges hadn’t even separated their general accounts from high-risk transaction accounts — a basic safeguard.

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What Exchanges Must Now Do

The FSC announced a three-pillar reform package on April 6. Exchanges must run automated balance checks every five minutes, with alerts and automatic trading halts triggered by major mismatches. Monthly external audits replace the previous quarterly schedule, and public disclosures must now include asset-by-asset blockchain holdings rather than a simple coverage ratio.

For manual, high-risk transactions such as event payouts, exchanges must use separate accounts, deploy validity-check systems that automatically reject mismatched inputs, and require cross-verification by a third party before execution.

The FSC will also require exchanges to appoint dedicated risk management officers and establish risk management committees — standards already expected of traditional financial firms. Compliance checks move from annual to twice-yearly, with results reported to regulators.

DAXA, the industry body, will complete self-regulatory amendments this month, with systems built out by May. Key provisions will feed into Korea’s forthcoming second-phase Digital Asset Act.

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The post Every 5 Minutes: Korea’s New Rule for Crypto Exchanges appeared first on BeInCrypto.

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Chaos Labs Leaves Aave Due to Budget, Risk Disagreements

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Chaos Labs Leaves Aave Due to Budget, Risk Disagreements

Chaos Labs has parted ways with the Aave ecosystem after serving as the crypto lending protocol’s main risk service provider for three years, citing a budget dispute and disagreements over how Aave should manage risk.

“This decision was not made in haste,” Chaos Labs founder Omer Goldberg said in a post to X on Monday. “We worked in good faith with DAO contributors. Aave Labs was professional and supported increasing our budget to $5m to retain us. However, we are leaving because the engagement no longer reflects how we believe risk should be managed.”

Source: Omer Goldberg

Aave Labs CEO Stani Kulechov said that Chaos didn’t depart on bad terms, but claimed that Chaos pitched a proposal seeking to become the sole risk provider and thus force out other partners — a compromise Aave wasn’t willing to accept.

Chaos played a key role in Aave’s back-end infrastructure, from pricing loans and managing risk in the Aave V2 and V3 markets since November 2022, during which Aave’s total value locked rose fivefold to $26 billion.

Risk has been a major talking point in the Aave community after a user lost $50 million in a trade while interacting with Aave’s interface on March 12. The following week, Aave said it would introduce an “Aave Shield” protection feature to deter users from high-risk trades.

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As for Chaos’ departure, Goldberg said there became an increasing misalignment over how the parties thought risk should be managed. He noted that some Aave contributors had left, raising its workload, while also arguing that Aave V4’s expanded functionality introduced additional operational and legal risks that fell on Chaos’ shoulders.

“While Aave Labs is optimistic about a swift migration to V4, history suggests these transitions take months and even years,” Goldberg said. “Until V4 fully absorbs V3’s markets and liquidity, both systems need to be operated and managed simultaneously. The workload during the transition doesn’t halve. It doubles.”

Weighing the risk of a protocol failure, Goldberg said, “There is no regulatory framework, no safe harbor, and no settled law that answers the question of what a risk manager or curator owes when a protocol fails. If things work, the work is invisible. If things break, the blame is not.”

As such, “We are walking away from a $5 million engagement,” Goldberg said.

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Chaos wanted Aave to boot LlamaRisk, Chainlink: Kulechov

Aave Labs CEO Stani Kulechov told a slightly different story, stating that Chaos wanted to be the sole risk manager and use its price oracles instead of Chainlink’s.

Following that request would have forced Aave to push out its other risk protocol partner, LlamaRisk, and thus abandon its two-layer economic risk model.

Related: DeFi lender Aave launches on OKX’s Ethereum L2, X Layer

Kulechov added Aave was unwilling to integrate Chaos-built price oracles, citing Aave’s “track record” with Chainlink’s services, which its “users are currently more comfortable with at scale.”

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He also said Chaos was already “exploring winding down its risk consultancy services,” and that Aave had offered to double its payment to $5 million to retain them.

Cointelegraph reached out to Chaos Labs for comment.

Kulechov noted that Chaos’ departure hasn’t disrupted the Aave protocol, its smart contracts, token listings or network integrations.

Moving forward, Aave said it “will work closely with LlamaRisk to ensure a smooth transition” and maintain its two-layer economic risk model. 

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Source: LlamaRisk

Chaos’ departure comes amid a protocol-wide feud over how much funding and revenue control Aave Labs should receive versus Aave’s decentralized autonomous organization.

Despite the internal issues, Aave crossed the $1 trillion mark in cumulative lending volume in late February, marking a first in the DeFi industry.

Magazine: Animoca teams up with Ava Labs, Shrapnel on Steam: Web3 Gamer