"exchange" is mentioned exactly zero times in the article. However, I'll let that slide as presumably you meant to imply that exchanges make money through yield farming, which also doesn't make sense because yield farming doesn't involve the participation of exchanges at all. As mentioned in the article, the concept is that a smart contract accepts deposits and hands out tokens, which constitute the yield. No part of that requires exchanges.
You seem to be under the impression that a crypto exchange is like a modern day stock or commodities exchange. It is not. It's much more akin to a hybrid of an 1860's era wildcat bank and a 1900's era bucket shop. Their main business is NOT executing crypto trades on behalf of customers no matter what they might say.
You really need to provide some citations. The fees are actually extremely lucrative, check the Coinbase filings during the bull run. The FTX trading fees were massive as well and is one of the reasons SBF is a profound idiot. He could have banked those fees forever but he wanted more and more gains so went to the dark side trading and using user funds and of course losing them.
> The (FTX) crypto exchange's revenue soared more than 1,000% from $89 million to $1.02 billion in 2021.
People really still take any financials that FTX released at face value? Do you also believe SBF when he says he was 8 minutes away from receiving billions of dollars of funding that would have made everyone whole when he mistakenly filed bankruptcy?
This article has nothing to do with how crypto exchanges make money. They make money from trading fees. Let's say your claim about wash trades is true, why wouldn't the exchange make money from those fake trades?
To answer GPs question, legit exchanges do spend a lot of money and effort on keeping user's assets secure so it's maybe not as easy as it seems. But in the case of FTX, I totally agree. FTX was like 2nd or 3rd highest volume exchange and could have been a highly profitable business on it's own. Only SBF knows the answer to why that wasn't enough.
SBF laid out in detail how crypto exchanges actually make money back in an April interview:
https://www.bloomberg.com/news/articles/2022-04-25/sam-bankm...