I think Biden has more priorities to do than crypto. The society conflict, health system (vaccination and health policies from Federal to State to reduce infected and death numbers). United States House of Representatives and United States Senate are highly conflicted between the Democrats and the Republicans. Any policy from Biden will be challenged by the Senate vote that probably will be dominated by Republicans.

Financial, economic problems and foreign policies will be on top of Biden priorities.

If exchange can be able to keep their exchange operations after hack, the compensation and loss they are suffered from a hack can be recovered from customers' trading fees. Hacks must be very big to shut down big exchanges.

While I don't hodl my money on exchanges, I think some might do it as a conscious choice. If one's choosing a reputable exchange, one might feel more comfortable with a serious company handling Bitcoin. This way they might rely on the exchange reimbursing the loss in case of a hack (I believe Binance took the $40 million hit fully on the company and users did not lose anything as a result), whereas nobody will give one anything if it's a personal wallet.
In any case, the talks about the US wallets seem more serious now than they used to, and I really hope they don't get to pass any sort of ridiculous KYC-demanding legislation or anything...

Conversely, MtGox ran away with everyone's money after going insolvent. The fallacy that so called reputable companies are responsible for any mistakes that they make is flawed. Binance was kind enough to cover for their mistake and it shouldn't even have happened in the first place. If the hack is due to the user's negligence, there would be no reason for the exchange to shoulder the responsibility as well (sim jacking is fairly common nowadays), 2FA isn't an iron fort as well.

In addition, if Coinbase can seize and hold your funds, I would think that holding your own coins would give you the assurance at the very least.

The positive thing will also come into crypto space if such kind of regulations gets implemented which is people are never going to use centralized services so the real decentralization can be achieved and also complete decentralized exchange will evolve to the next state of adoption from traders and investors. The government is trying to make people more inconvenient while using cryptos but they never realized that there is always an alternative way to bypass such stupid regulations.

It's a somewhat slightly understandable excuse(though not enough to get me convinced) if it's the case that a certain person doesn't really care about AML/KYC. While I think they should care, if they don't, it's really none of my business. But this is completely assuming that only the hot wallets of a certain exchange gets hacked. If everything actually gets compromised(which is nothing new), welp, good luck getting reimbursements.

I agree.

Exchanges are prone to hacking that's why storing your coins on it if you're not actively trading is not really recommended. Also, it is possible that your coin could be burn even without you knowing since you're just holding your coins there, compare to the wallets you have control over the coins you have, it is more safer and reassuring that your coins are safe.

Some Governments are too greedy that even cryptocurrencies and its users are in danger because they might get something they won't see coming since we're talking about corrupted Governments.

I guess you're right, I totally ignored the network effect aspect. Pretty much somewhat a "strength in numbers" thing. While I'm not sure we can do anything with the KYC thing, and while I think it's a bit too unrealistically optimistic to think that most people would be doing coinjoins and mixing for on-chain privacy, I hope we get to a point where some coinjoin or mixing occurs by default on wallets(probably after every tx, or something).

You do you mate. But once shit hits the fan on the exchange you're using, don't tell us we didn't warn you. https://cryptosec.info/exchange-hacks/

Armstrong is already acting on those rumors and implementing additional KYC. People who traded for a long time on verified accounts are now asked for the source of their money and their line of work. I have a friend who works for a local exchange (in the EU) and he said that based on the paperwork that's coming to them from the government, he's giving us 2 years tops until they'll be asked for full client verification on all transactions, including face to face. This is so dumb that I can't find words to describe. You can take 10k USD in cash, go to a local currency exchange, throw it on the counter and get an equivalent in EUR within 5 minutes. You do a similar thing with your coins and they'll ask you for an ID and a signature. They might even ask for a source of funds...

Yeap. I'm thinking more of an easily on-off toggle-able privacy option on hot wallets. Basically for those casual users that want privacy, but isn't willing to learn about utxos and other stuff that might be too technical for the casual everyday user.

But yea I mostly agree on the custodial part.

In my humble opinion, any ridiculously strict regulation such as regulation of open-source software wallets and regulation regarding enforcement of performing KYC procedures will be beneficial for bitcoin adoption. Presently, bitcoin adoption almost entirely depends on centralized organizations. People think of bitcoin in dollar price terms, they are buying things with it while measuring prices in national currencies, they trade bitcoin to make short-term profits in government fiat. Centralized cryptocurrency exchanges, with which people can trade, make profits, sell their bitcoins, store "their" bitcoins are the main driver of this movement. Currently, most people consider bitcoin just a magical technology that was created to enrich them all. No, bitcoin is about something else. Bitcoin is about the free economy, free trade, free interrelations, free access to money. With bitcoin, you don't have to ask for permission to buy something legal. With bitcoin, you don't need to comply with ridiculous regulations that became obsolete a long time ago. Once people realize that bitcoin is simply better and fairer than traditional systems and centralized organizations, that it can exist without them or despite them, they will switch to bitcoin and will never look back. What the authorities can do by introducing such ridiculous rules is to bring this moment of understanding closer.