What to know:
- A Bank for International Settlements report warns that many crypto exchanges now offer bank-like lending and yield products that function as unsecured loans to lightly regulated shadow banks.
- The report says these “earn” and yield products, heavily marketed to retail investors as passive-income tools, pool customer assets into risky activities without deposit insurance, clear transparency or traditional banking safeguards.
- Citing the collapses of Celsius Network and FTX and the October 2025 flash crash, the authors argue that leverage, opacity and deposit-like promises without protection leave users directly exposed to platform solvency risks.
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