What's New :
UPSC Interview Guidance Program. Register here...

FSB’s concerns about crypto asset intermediaries

  • Published
    12th Dec, 2023

Financial Stability Board (FSB)’s latest report on crypto-asset intermediaries sought measures to enhance cross-border cooperation and information sharing among local authorities.

Multi-function crypto-asset intermediaries (MCIs)

MCIs as firms providing various crypto services, such as trading, posing risks due to a lack of controls, transparency, and potential conflicts of interest.

In traditional finance, separate entities handle these functions, preventing conflicts and promoting integrity.


Key Highlights-

  • Revenue Sources:
    • MCIs earn from transaction fees, blockchain infrastructure operations, proprietary trading, and diversified services.
    • Limited publicly disclosed information makes assessing revenue sources challenging.
  • Transparency and Governance:
    • MCIs lack transparency about their corporate structure and are privately held.
    • Poorly separated business lines and limited disclosure raise concerns about their vulnerabilities and governance.
  • Risk Management:
    • The report notes that poor risk management may facilitate insider misconduct and inflate prices of self-issued crypto assets.
    • Lack of transparency hides risks until negative shocks materialize.
  • Concentration Risk:
    • Market dominance by one or more MCIs may distort crypto-asset prices and facilitate anti-competitive behavior.
    • Concentration risk raises barriers, increases costs for users, and amplifies vulnerabilities.
  • Spillovers to the Financial System:
    • The threat to global financial stability from MCI failure is presently limited but recent events highlight vulnerabilities.
    • The failure of crypto-friendly banks post-FTX collapse led to significant losses and shook confidence in crypto markets.


The FSB report underscores the need for improved regulation and transparency in the crypto space, emphasizing the potential risks associated with MCIs. It points to the challenges in assessing their revenue, managing concentration risks, and the spillover effects on the broader financial system.

GS Mains Classes GS Classes 2024 GS Classes 2024 UPSC Study Material

Verifying, please be patient.

Our Centers

DELHI (Karol Bagh)

GS SCORE, 1B, Second Floor, Pusa Road, Karol Bagh, New Delhi - 110005 (Beside Karol Bagh Metro Station Gate No. 8)

Get directions on Google Maps

BHUBANESWAR (Jaydev Vihar)

GS SCORE, Plot No.2298, Jaydev Vihar Square, Near HCG Day Care, BBSR - 751013

Get directions on Google Maps

LUCKNOW (Aliganj)

GS SCORE, 2nd Floor, B-33, Sangam Chauraha, Sector H, Aliganj, Lucknow, UP - 226024

Get directions on Google Maps

Enquire Now