Just like how your money in the bank isn’t actually sitting there, your crypto on a Centralised platform isn’t either.

This isn't some dubious secret.

A fair few people assume when you deposit money in the bank they take that and have a special place they store it seperate for others with your name on it. In actuality they throw it into a pile and loan/invest it out. If you withdraw it's from a small on hand amount of cash sized accordingly to cover the normal volume of withdrawal.

It's the same with centralised crypto exchanges and CeFi services. They just keep a ledger of your "balance" but just throw your money into a centralised wallet for that particular crypto.

Depending on their terms of service of the platform, they can do what they want. They could lend it out straight away after deposit. They just need to keep an amount on hand to cover normal withdrawal volume. For example if you're trading in app, it's just them adjusting the ledger nothing on the blockchain changes in terms of coins being transferred.

So that balance number showing in the platform app isn't anything until you go to withdraw. As there could be nothing behind it, which was shown with Celsius Network.

This isn't to say it is wrong or not, rather to lay out how these platforms actually work.