The Bank for International Settlements says large crypto exchanges and intermediaries now provide bank-like services (lending, high-yield “earn” products) while lacking traditional safeguards, insurance and transparency. These “multifunction cryptoasset intermediaries” take deposit-like liabilities and redeploy them into risky activities, creating unsecured claims on platform solvency. The report cites the collapses of Celsius and FTX and the October 2025 flash crash (about $19 billion in forced liquidations) as examples of how leverage, opacity and deposit-like promises can trigger rapid, systemic losses.

The BIS report states exchanges offer bank-like services without traditional safeguards and take deposit-like liabilities that are recycled into risky activities; it cites Celsius and FTX collapses and the Oct 2025 flash crash (~$19B forced liquidations) as examples of how leverage and opacity can cause rapid, systemic losses — facts that justify a bearish sentiment and meaningful short-term trading impact.