BIS Warns Crypto Exchanges Are Becoming 'Shadow Banks'

The Bank for International Settlements (BIS) has issued a report highlighting concerns about cryptocurrency exchanges offering bank-like services without adequate protection.

The BIS notes that crypto exchanges are increasingly providing lending and yield products, which pool customer assets into risky activities without deposit insurance or traditional banking safeguards.

The report emphasizes the need for proper rules and regulations to mitigate these risks, as seen in the collapse of Celsius Network and FTX. The authors argue that the growth of 'earn' and yield products poses a significant threat to users' assets, particularly those marketed as passive-income tools.