Never said all exchanges. Nice of you to put words in my mouth to build a strawman and shoot it down.
Some exchanges were. Maybe some still are.
Fractional-reserve banking is the practice whereby a bank holds reserves (to satisfy demands for withdrawals) that are less than the amount of its customers' deposits.
from wikipedia seems like a good definition for fractional reserve banking.
A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities...
ibid seems fine also.
And those definitely meet what has happened in the world of BTC exchanges. Were they officially lending? Probably not. But as soon as they start dipping into "deposits" and later reimbursing those deposits, somebody is making money by borrowing the "excess" reserves.
Financial institution? Check.
People deposit financial assets? Check.
Fractional reserves? Check.
Lending of those assets? Check.
Sure sounds like it meets at least one public definition of fractional reserve banking.