If these platforms operates by charging service fees for users to buy and sell cryptocurrencies, it sounds like a fail safe business model.
How can they actually incur debt and go bankrupt?
In: 3
You’re correct it’s fool proof unless:
– They hold a stake in some crypto/realted assets, particularly if it’s margined (i.e. they borrowed money to buy it)
– Let customers trade on borrowed money, which the customer then defaults on and the exchange is left holding the bag
– have high expenses (staffing) that were only covered when crypto trading volumes were high, and now people don’t want to trade crypto as much so your revenue disappears
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