Crypto Firms Like FalconX, GSR and B2C2 Play Shadow Banking Role for High Returns

According to The Information, the collapse of major cryptocurrency-friendly banks last year caused quite a bit of trouble in the cryptocurrency market, making it more difficult for hedge funds and other cryptocurrency investors to move their money at the pace required for most transactions.

However, a growing number of cryptocurrency brokers (such as FalconX) and cryptocurrency trading firms (including GSR and B2C2) have stepped in to provide short-term financing to ensure that their clients' trades can be settled immediately, generating huge returns in the process, and several cryptocurrency brokers acting as shadow banks are offering short-term loans to make up for the mismatch in timing, charging as much as 25% in per annum.