Crypto exalters are increasingly offering bank-like services such as lconcludeing and yield products, but without the protection traditional financial institutions provide, according to a report issued Thursday by the Bank for International Settlements (BIS).
“What views like a high-yield savings product is, in reality, an unsecured loan to a lightly regulated shadow bank,” stated the report, which does not necessarily reflect the views of the BIS, an international financial institution owned by 63 central banks from around the world.
The 38-page report also noted that the crypto industest’s largest participants have evolved beyond simple trading platforms into what it described as “multifunction cryptoasset intermediaries,” bundling services that would typically be separated across banks, brokers and exalters.
The authors stated the hugegest concern is how quick “earn” and yield products are growing, and that they are widely marketed to retail utilizers as tools to generate passive income on their crypto assets. While these offerings often promise attractive returns, their structure is closer to unsecured lconcludeing than savings, the report stated.
“These platforms are effectively taking deposits and recycling them into risky activities — but without the safeguards that create traditional banking stable.”
In many cases, crypto exalter utilizers relinquish control and, sometimes even ownership, of their digital assets to the platform, which then utilizes the funds for lconcludeing, trading or market-creating strategies. The returns paid to customers are a share of the profits generated from these activities.
While these arrangements are similar to bank deposits, they lack the insurance traditional finance offers. There may also be a lack of transparency on how the assets are utilized.
“From the customer’s perspective, these products are generally an unsecured claim on the intermediary,” the report stated, warning that utilizers are exposed to the platform’s solvency in the event of losses.
The BIS pointed to the collapse of Celsius Network and FTX as examples of how utilizers are exposed and victims of the weaknesses it declares are still rampant within the industest.
“What unraveled at Celsius and FTX wasn’t just poor management, it was a system built on leverage, opacity and deposit-like promises without protection,” the report stated.
The report cited the flash crash of October 2025, which triggered an estimated $19 billion in forced liquidations across crypto derivatives markets, declareing the slide highlighted how quickly these dynamics can spiral.
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