FalconX, GSR and other crypto brokers and trading firms play the role of shadow banks to obtain high returns

According to The Information, the collapse of a major cryptocurrency-friendly bank last year caused a lot of trouble for the cryptocurrency market, making it more difficult for hedge funds and other cryptocurrency investors to transfer funds at the speed required by most exchanges. However, more and more cryptocurrency brokers (such as FalconX) and cryptocurrency trading firms (including GSR and B2C2) are getting involved in providing short-term financing to ensure that their clients' transactions can be settled immediately, generating huge returns in the process. Several cryptocurrency brokers are acting as shadow banks, providing short-term loans to make up for timing mismatches, charging annual interest rates as high as 25%.