Essentially that they are most likely dipping in to support either their operations or other projects from the customer funds. That's not proof, but I would not at all be surprised if there isn't a single one of them that is clean.

I mean, being the custodian of funds actually costs money, one should wonder about the motives of the exchanges offering custody for the funds.

There are many banks in europe that will not open accounts for people who just moged there, unless they bring along plenty of money.

This simply means that having your coins on an exchange is the same a forfeiting them unless otherwise proven.

But the crypto exchanges double down on that, they speculate like the banks do, but with zero risk managment and oversight, the biggest accounting firms do not want to offer their services to them.

They have also leveled up their exit strategies, instead of the plain old run away, they run the business while they can extract money and then later they seek legal cover under the umbrella of bankruptcy laws.

There is also the possibility that they have too many assets due to participating in money laundering or tax evasion.

There really aren't a lot of good possibilities here, how did these exchanges get so large before anyone thought of audits?

> how did these exchanges get so large before anyone thought of audits?

Who said no one thought of this? There was simply no one to enforce this.

Look at Coinbase. They made a point of being “regulated in the US”. They’re audited. They’re legit (most likely. I’m not the auditor). They’re complying with disclosure laws as a publicly traded company.

Look at Patio11, he’s been publicly making claims about tether and the crypto ecosystem for years. If it all blows up and his speculation /research was right, then who is to blame? We’ll have years of boy crying wolf and we thought it was a sheep.