[y04nn]

By the way, because a lot of people are keeping their crypto on exchange, would it be possible for an exchange to have fractional reserves like for banks? It is probably doable for big exchanges as trades happen on a platform they control anyway and crypto only goes out when a customer sends money to an external address. They may be able to keep only a third of customers account balance and still operate as usual.

[immibis]

Most exchanges are suspected to secretly run fractional reserves.

Binance in particular has its own blockchain and gets to run fractional reserve on most of the assets bridged to that block chain - the bridge keeps the real copies of the assets while only "shadow copies" are "projected" onto the Binance chain and traded.

[tomaskafka]

Yes, the solid ones keep the rest in the cold storage, the remaining ones steal the rest and lie to clients about the money existing:).