The Bank for International Settlements has warned that large crypto platforms now operate like banks and prime brokers without equivalent regulatory oversight.
A new Financial Stability Institute paper describes these firms as “multifunction cryptoasset intermediaries” that take deposit-like funds while lacking capital, liquidity, and governance requirements applied to traditional banks.
The report highlights that yield and “earn” products effectively transfer ownership of customer assets, creating liabilities similar to deposits but without deposit insurance or central bank backstops.
The authors cited past failures including Celsius Network and FTX as well as a $19 billion leveraged wipeout during the October 2025 flash crash as evidence of systemic risk.
“Multifunction cryptoasset intermediaries,”
The BIS paper said, warning that these structures replicate risks long associated with shadow banking, and following the report BIS does not have a listed share price as an international organisation.
The study also flagged weak transparency, noting that many large providers still do not disclose how customer assets are used or publish detailed financial statements.
The BIS called for a combination of entity-based and activity-based regulation alongside stronger cross-border supervision, as increasing interconnectedness between crypto firms raises the risk of rapid contagion across the sector.