> Are you suggesting that bitcoin exchanges keep a fractional reserve?
No, fractional reserve would imply transparency. I'm pointing out that historically, several large bitcoin exchanges have lost or stolen their customers' coins, and lied or tried to hide that fact.
BTC-e has never been a reputable exchange. Nobody has recommended its use ever since there's been reasonable alternatives, such as Coinbase and Kraken.
Also, the fact that it was used for money laundering does not in any way show that the exchange system provided to customers was anything other than totally above-board. That the police are able to steal people's money when the issue at hand has nothing to do with those people's money is the problem here. HSBC isn't stealing its customers' money because it turned a blind eye to money laundering either.
No, fractional reserve would imply transparency. I'm pointing out that historically, several large bitcoin exchanges have lost or stolen their customers' coins, and lied or tried to hide that fact.