Traders only trade digits regardless of any reason that the exchange fully reserves bitcoins.
FTX has disclosed the fact that exchanges are likely to engage in high-risk practices that could potentially deprive customers of bitcoins through some third-party business schemes.
After the FTX collapse, regulation has increasingly been in the midst of clamping down on the transparency of CEXes with multiple audit policies, though some argue that's not enough and discourage traders from putting too much faith in the results.