Could Trading-Only Crypto Exchanges Like Robinhood Trading Naked Options?

Disclaimer: I am not accusing RH or other exchanges of any wrongdoing. I am merely pointing out a concern I had and trying to see if anyone knows of information that would disprove it. I only posted after spending considerable time searching and being very surprised at how opaque the RH crypto operation is, overall, in comparison to exchanges of their size that have all sorts of technical info posted in public and easily accessible.

/start: TLDR

There is two problems that could be potentially happening right now.

1) People buying and selling billions of crypto assets, with zero impact on the price of those. Regular exchanges check the buys and sells from the master source of truth, the blockchain itself, and adjust the prices based on that.

2) (Applies mostly for smaller coins) There could be more coins being traded than actually exist in the blockchain.

/end: TLDR

Blockchain was invented to guarantee transparency and give peace of mind about problems like that happening from existing fiat centrally-managing systems, but with trading-only exchanges like RobinHood, there is no guarantee of protecting against those anymore. I could be wrong and there is a page somewhere that has information that proves otherwise, but I couldn't find it, hence trying to pick up your brains by posting this.

RobinHood doesn't allow transferring coins in or out. Never had and never will (from everything they talked about so far at least). It only allows buying and selling.

Are there are any actual underlying coins at all anywhere in the system? For smaller coins in particular, does this mean that in theory there could be more coins traded than existing supply?

Is there an SEC regulation that mandates they hold actual coins?

Since there are no transfers in, how do they obtain the crypto they're "selling" to you?

Do they have a wallet for each crypto currency? Is the app-only transaction volume public?

Does the SEC compare and verify the in-app transactions match with the wallet transactions for each crypto asset?

Is any of this public so anyone can go into the Blockchain and compare the RH buying/selling volume to that of the actual wallet on the Blockchain?

If the trades are naked, does that mean there could be massive buy and sell operations happening there that do not have any impact on the crypto price since no one else can see them? i.e. Buying or selling a billion BTC would be reflected in the blockchain and all exchanges would act and raise or lower the BTC price, but if the RobinHood trades are all naked, that won't happen. That, would be really weird. It would be like a parallel universe where the laws and supply and demand no longer exist.

The information they released is so limited and I couldn't find anything useful to confirm or deny my thoughts. Even assuming that RH was trading covered crypto assets, Is anything that could prevent anyone exchange from creating a fully-naked crypto exchange?

I am writing this in case someone knows any better.