Here's a short story of something I observed on BiteBTC long ago.

A buddy and I worked on getting a market opened there.
He completed the KYC and I did not.

After a very long time passed, the KYC process for him had completed and our market was already open for trading.

This is where it gets very interesting.

He deposited a small amount of our coin to test deposits, trading and withdrawals as we do every time a new market opens.
There were already some buy orders in the order books at this point.

He takes one coin to sell into it.
Immediately, the buy order disappeared from the books.

(I'm watching this happen on their live site in realtime.)

Next he tried to fill an order by selling into the remaining highest buy order.
Immediately, the buy order vanished.

This went on and on until we saw each and every buy order disappear while attempting to sell into it down to one satoshi.

In other words, the order books -- particularly the buy orders were 100% make believe for the market they opened for us.

My buddy still had all of the coins he sent there for the original deposit on account, because any attempt to sell into the buy orders was preempted by the buy order being cancelled.
I'll have to ask him again if he actually withdrew the initial deposit successfully.
It was a few dollars worth of an altcoin at the time.