> Never heard of an “exchange” before that somehow collapses due to a good one bank run.
Well, in these “modern more sophisticated” times, exhanges do things like lend against items stored with them. i.e. they are using somebody else’s property as collateral for loans.
What you are describing is banking created by the Italians when they lent out other people’s gold kept with them for safekeeping. Now instead of gold it is cryptocurrency with zero intrinsic value.
I am laughing so hard at the thought these exchange owners thought they hit on something new and daring over the old and stolid fractional reserve banking. They just rebranded something that has been around for half a millennia.
“exhanges do things like lend against items stored with them...”
Sure, banks do that too, but at least the banks are insured by the feds to some degree if such risky behavior leads to catastrophic losses. I don’t think the same is true with these crypto exchanges.