Crypto Shadow Banking Explained: Credit for Market Makers
Too Long; Didn't Read
Crypto shadow banking is our industry’s biggest secret, where billions of dollars are borrowed & lent on an un-collateralized basis, between some of the industry’s biggest names. While the public focus has been on the activities of crypto shadow banks, such as BlockFi, Celsius, Voyager, and Gemini, most “experts” failed to see a massive amount of the crypto shadow banking happening on the balance sheet of crypto exchanges, as a part of credit generation for the purpose of enhancing liquidity.