BIS Warning: Crypto Exchanges Are Evolving into "Shadow Banks," Users Face Unprotected Risks

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Odaily Planet Daily News reports that the Bank for International Settlements (BIS) has released a report stating that crypto exchanges are gradually offering banking-like services, such as lending and yield products (Earn), but lack regulation and deposit guarantees found in traditional financial systems, posing systemic risks.

The report states that these high-yield products are essentially closer to “unsecured loans,” where user assets are often used by platforms for lending, trading, or market-making activities, which are high-risk operations, and users only hold claims against the platform. If the platform encounters issues, users are directly exposed to repayment risks.

BIS also notes that leading crypto platforms have evolved from single exchanges into “multi-functional intermediaries,” integrating banking, brokerage, and exchange functions, but lack transparency and risk isolation mechanisms. The collapse of Celsius Network and FTX are typical examples of such structural risks. Additionally, the report mentions that a flash crash in the crypto market in October 2025 triggered approximately $19 billion in forced liquidations, highlighting the chain reaction risks under high leverage and opaque structures. (CoinDesk)

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