BIS report warns crypto exchanges' rapid growth and lack of standardized rules leave users at risk

A Bank for International Settlements (BIS) report highlights that cryptocurrency exchanges are increasingly functioning as 'shadow banks' by offering bank-like services such as lending and yield products without the regulatory safeguards or insurance found in traditional finance. These platforms, described as 'multifunction cryptoasset intermediaries,' bundle services typically separated across banks, brokers, and exchanges. The report expresses concern over the rapid growth of 'earn' and yield products, which are marketed to retail users as passive income tools but are structured as unsecured loans. Users often relinquish control of their digital assets, which are then used for risky activities, with returns shared from profits. Unlike traditional bank deposits, these arrangements lack insurance and transparency, leaving users exposed to the platform's solvency risks, as exemplified by the collapses of Celsius Network and FTX. The report also notes that market volatility, like the October 2025 flash crash, can quickly exacerbate these risks.

(Source：CoinDesk)