Others have answered about how Celsius got into trouble, as it was not a trading platform, but I'll answer the implied question - if it's all on a blockchain, h

Others have answered about how Celsius got into trouble, as it was not a trading platform, but I'll answer the implied question - if it's all on a blockchain, how can a trading platform have a liquidity crisis? The answer is - it's not all on the blockchain. The vast majority of transactions involving bitcoin are nowhere near a blockchain, they're all on a database (or similar tech) that the exchange runs. Blockchain transactions only occur on deposit or withdrawl of funds into or out of the exchange. If (as in the case of an entity like Quadriga CX) somebody 'accidentally' removes and loses most of the cryptocurrency, the exchange can continue to operate for quite some time, so long as everyone doesn't try to withdraw at once.