> I don't think this was the case, unless you can show me otherwise.
Quadriga CX showed their users having BTC in their accounts.
In reality, the guy running the show had already gambled those away on other exchanges.
It all held together, ish, until he died and the music stopped.
> In particular, they had "BTC ATMs" where people could withdraw cash.
This is news to me and hasn't featured in any write-up of QCX I've ever seen.
> And when the CEO died, the BTC could not be retrieved. There was no magic second exchange-issued BTC around - it was gone because there is only one copy.
Yes, this is exactly what we're talking about - we have no real idea how much BTC is in peoples accounts on exchanges, because they are a black box and may be creating it out of thin air. While they don't try to move too much of it and the exchange remains operational, the ecosystem functions as if those balances are correct.
> Quadriga CX didn't produce any more BTC - they just lost their customer's BTC.
While they were still solvent it behaved as if there were more BTC present. Sure, they didn't create more on the blockchain, but they were able to operate as if there was more.
Until they weren't.