The Bank for International Settlements (BIS) released a Financial Stability Institute report in April 2026, warning that the largest crypto platforms are currently acting as financial intermediaries without the capital buffers, deposit insurance, and access to central banks that apply to traditional banks.
Important points:
- In April 2026, the BIS Financial Stability Institute warned that major crypto platforms such as Binance and Coinbase are currently operating more like banks than trading venues.
- Celsius Network collapsed in 2022 after $1.4 billion in depositor management exposed maturity mismatches due to the lack of a deposit insurance backstop.
- Of the 28 jurisdictions reviewed by the FSB in 2025, only 11 had a final regulatory framework addressing financial stability risks posed by crypto intermediaries.
Crypto Earn Accounts Caught as Uninsured Deposits, BIS Investigation Warns
The report, written by Denis García Ocampo of the BIS and Peter Goodrich and Giampiero Lovic of the Financial Stability Board, focused on what researchers called multifunctional crypto-asset intermediaries (MCIs). This term includes companies such as Binance, Bybit, Coinbase, Crypto.com, Kraken, MEXC, and OKX.
These platforms are expanding beyond spot trading and custody. They currently offer income accounts with yield, margin lending, derivatives, and token issuance. In traditional finance, these functions are typically separated across different licensed entities.
The total value of the crypto asset market was approximately $3 trillion at the end of 2025. Centralized exchanges processed approximately $6 to $8 trillion in spot and futures trading volume each quarter. Binance alone accounted for about 39% of the world’s concentrated spot trading volume. The top five MCIs collectively served an estimated 200 to 230 million users.
The paper’s central concern is revenue products. When a customer deposits cryptocurrencies into Binance Simple Earn or Bybit Easy Earn, the terms and conditions transfer ownership of those assets to the platform. MCI pools funds, deploys them across lending, market making, and DeFi, and pays variable yields to users. The customer becomes an unsecured creditor rather than a legally protected depositor.
This structure results in short-term maturities backed by long-term or illiquid assets. Researchers call this the maturity and liquidity transformation, which is the same risk that banking regulators manage through capital and liquidity requirements. MCI faces this situation without these guardrails.
The collapse of the Celsius network in 2022 exemplified that exposure. Celsius experienced more than $1.4 billion in net withdrawals from May to June of that year. By June 12th, the platform had frozen withdrawals. When it filed for bankruptcy on July 12, its balance sheet showed a multibillion-dollar deficit. The bankruptcy court recognized Celsius aan User as a general unsecured creditor.
The flash crash that occurred on October 10, 2025 further intensified these concerns. Cryptocurrency prices plummeted in 30 minutes, triggering a cascade of automatic liquidations across derivatives platforms. Reported direct losses reached $19 billion the next day. Binance suffered a business outage during the event, and three tokens used as margin collateral, including an algorithmic stablecoin, temporarily lost their pegs. Binance announced $283 million in customer compensation following the incident.
The report examined the terms and conditions of eight major MCIs from November 2025 to March 2026 and found that most income products give the platform full discretion over the deposited assets, reserving the right to commingle with other customers’ funds and suspend redemptions without notice.
Using leverage further increases risk. Some platforms allow retail customers up to a 150:1 margin on derivatives contracts. The paper draws a direct line from that leverage to a liquidation cascade in October 2025.
The FSB’s 2025 Thematic Review found that only 11 of the 28 participating jurisdictions (approximately 39%) have a final regulatory framework that addresses financial stability. Of these, only two covered borrowing and lending by MCI. There are three eligible revenue products.
The authors call for prudential capital and liquidity requirements, governance standards, stress testing, and integrated supervision applied at group level. They recommend a combination of entity-based and activity-based regulation, noting that activity-based regulation alone cannot address the funding and liquidity risks faced by MCIs.
Core gaps in cross-border cooperation remain. Many large MCIs allocate functions across dozens of jurisdictions through separate legal entities, and formal supervisory information sharing agreements between regulators remain uncommon.
