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Odaily News: A report by the U.S. Senate Permanent Subcommittee on Investigations (PSI) has identified stablecoins, particularly USDT, as a key liquidity channel supporting Iran's shadow banking system. Licensed Virtual Asset Service Providers (VASPs) in the Gulf Cooperation Council (GCC) region face heightened sanctions compliance pressure and need to strengthen wallet attribution identification and counterparty assessment.Soham Jethani, a partner at law firm Septten, stated that merchants settling crypto assets into local fiat currency does not mean they can circumvent sanctions risk. Liability may arise from providing designated persons, funds, or economic resources, as well as handling assets within the transaction chain, and may materialize before the bank completes final settlement.Jethani noted that the name of a stablecoin or its denomination currency does not determine legal ownership; specific rights depend on contractual arrangements and the actual payment process. Globally circulating stablecoins may also bring secondary sanctions risk. Indirect or historical wallet associations do not automatically constitute a violation; determination requires consideration of the applicable regime, transaction participants, and specific facts.In regulated markets such as the UAE, licensed exchange wallets are continuously monitored, and relevant funds can be frozen before consumer settlement, while merchants must also complete KYC. Regulated VASPs handling deposits and withdrawals bear responsibility for counterparty and sanctions risk assessment and corresponding controls. (Bitcoin.com News)
the Bank for International Settlements (BIS) has released a report stating that crypto exchanges are increasingly offering banking-like services, such as lending and yield-bearing products (Earn), but lack the regulatory oversight and deposit protection found in traditional financial systems, posing systemic risks.The report states that these high-yield products are essentially more akin to "unsecured loans." User assets are often used by platforms for high-risk operations such as lending, trading, or market making, while users only hold a claim against the platform. If the platform encounters problems, users are directly exposed to solvency risks.The BIS also noted that major crypto platforms have evolved from simple exchanges into "multi-functional intermediaries," integrating the functions of banks, brokerages, and exchanges, but with insufficient transparency and risk isolation mechanisms. The collapses of Celsius Network and FTX are typical examples of this structural risk. Additionally, the report mentions the crypto market flash crash in October 2025, which triggered approximately $19 billion in forced liquidations, highlighting the risk of cascading effects under high leverage and opaque structures. (CoinDesk)