A new report published by the Bank for International Settlements (BIS) has revealed that cryptocurrency exchanges are increasingly offering bank-like services that lack financial protections. The report emphasized the rapid proliferation of products that offer interest income, especially on leading platforms.
Crypto exchanges expand their borders
Crypto exchanges, which initially operated only by trading digital assets, have recently become multi-service structures with high return products based on funding, lending and savings. In BIS’s 38-page analysis, it was stated that this development is similar to the merger of intermediary institutions in traditional banking transactions.
However, according to experts, “win” and return-based products in the crypto ecosystem seem especially attractive to individual investors. Despite this, it was stated that the operation of these products is closer to an unsecured lending system rather than a deposit account. It has been noted that users occasionally transfer control of their crypto assets to platforms; These assets can be used by exchanges in credit transactions, market making or their own transactions.
The following statements were used in the BIS report: “These structures, presented as high-interest savings products, are actually unsecured loans given to loosely supervised shadow banks.”
Lack of traditional financial protection and transparency
These products provided by exchanges to users do not include financial protection mechanisms such as guarantee and insurance found in traditional banking systems. Users may not have sufficient information about the digital assets they transfer to the platform and where and how they are used later.
This puts investors at risk of not being able to get their assets back if the stock market goes bankrupt or suffers a loss. The report pointed out that although the way these products work is similar to bank deposit accounts, they actually create an unsecured demand on the platform for users.
“From the customer’s perspective, these products create an unsecured right to the intermediary; in case of loss, they are completely dependent on the platform’s solvency,” the evaluation said.
Lessons learned from market crashes
BIS also mentioned the Celsius Network and FTX crashes in the report. Both incidents showed that investors can fall victim to weak structures and lack of oversight on the platform. The report highlighted that not only management errors, but also leverage, lack of transparency and promises such as uninsured deposits weakened the system.
The sensitive structure of crypto markets once again attracted attention in the sudden decline in October 2025. The sharp collapse in derivatives markets triggered forced liquidations of approximately $19 billion. By giving this example, the report revealed how quickly and unpredictably the system can be shaken.
BIS also pointed out that “What happened in Celsius and FTX was not just about bad management; the system was built on promises such as high leverage, uncertainty and unprotected deposits.”
Stating that current regulations are not sufficient, the report authors stated that they think user protection in the crypto industry should be increased. Users were warned to be extra careful about products offered on such platforms with promises of high returns.
