Hi worldofdave. Actually it is not that complicated. I'll show you a personal examples.. (It is actually a good idea to describe this comment in an article). Four or five years ago I was noticed of bitcoin from one colleague and I went to trading with it. But in active trading instead of HODL. So I lost some $ in the battle with the market and sold them out (Only if I hodl those 5+ bitcoins :D ). Half a year ago when bitcoin went to 2000$ I bought 0.1 bitcoins ( 0.124515 BTC ). I cannot find any info of those old transations??? Why? . I didn't checked the transaction last summer but right now from the information that I can get from here:
https://live.blockcypher.com/btc/tx/5a5b2eb3237355d38f0c5d81dc22493f9a35224855c4b52dc527fc529ea94d76/
I can see that there is a lot of going on (on-chain) beyond my stuff. They are
most likely using some internal database to store and show crypto information to their users, but internally they probably store the crypto in united wallets. And when you do internal transfer - they only change some records in a database - without on-chain actual transfers. This is part of their marketing, a way to attract more consumers. In marketing, controlling (technically, physically and psychologically) the consumer's stuff is key to success.