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