I personally don’t believe they do this , at least not the big exchanges like Coinbase. I know not your keys not your coins , I agree with that. But do you think they create “paper bitcoins” so that they are are selling “bitcoin” but not actually holding that exact amount of bitcoin their customers are holding in their accounts? Could this be audit on chain versus public information on these companies? At least for Coinbase being a publicly traded company. What does the community think …
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