Could BTC brokers be “sold out” of coins

Hello, just wanted to open a discussion about how these exchanges conduct business. With all the ambiguity behind crypto, does a exchange have to hold or have the actual coins they sell. Is anyone aware if these exchanges are doing essentially what banks do and are they selling more than what they actually hold.

Just interested in clarity on this, obviously I know not your keys not your crypto and cold is best but what’s the rules and does anyone think these exchanges can go bankrupt or oversell.