The other day I was thinking about trading and trading platforms. Because I am new to the field, I might not understand certain things you guys might already know.
For example, when you buy a stock, say AAPL, how do you get out your AAPL from the exchange? In case of BTC you can send it to the hard wallet and then keep it there. Then I thought ok, probably buying a stock is just a record on a book. You never will see the physical stock (piece of paper). But then what if the exchange never had that stock?
And projecting this thought to the crypto exchanges, what if some well known CEX do not have enough BTCs that is being traded on that exchange? All that numbers and volume could be fake. Then the CEX is becoming like a traditional bank, where unless everyone will want to withdraw their BTCs, they are ok trading non existing BTCs.
well, what do you think?
LoL same case was with crypto exchange FTX. it was using all of users funds in other exchanges and thus when FTX get caught that was Disaster for them and all of people money was gone. I have seen that people have lost more than millions of dollars and all of their funds gone. And that was because of FTX drama.
And also if they have no funds than they have fake mechanism to show your funds in your account.