And the funny thing is, regular FIAT systems have the same scam attack vectors as cryptocurrencies plus some more.

For example your FIAT account can be accessed to take loans even if your account has no money in and on top of that you have to trust this third-party which includes underpaid employees that have been caught numerous times on stealing from clients and even closing accounts after theft.

Everything that's happening in cryptocurrencies also happen in FIAT banking systems but on much larger scale and with even more security issues.

Well I personally prefer using decentralized exchanges however it really depends on the person’s personal interests and objectives. Some CEX have really good customer interface that a lot of people look out for. Usually good for beginners as well.

Some people also find CEXs more safe and secure than DEX.

This is due to lack of education about the threats, a true DEX will always be more secure than CEX due to many reasons - one of them are hacks and stealing of information, exit scams, etc.

I would thought the last case of SBFried should be enough to not trust CEX, ever.
But seems people need to get their own hands burned.

People are still heavily accustomed to being babysit by regular banks, they falsely believe that people behind this money services are safer than math.

I mean, if you really have to use CEX parasite, use it but don't store your coins there - if you do, be aware you are using a regular bank created by shady people and at that point it has nothing to do with cryptocurrencies, you have used cryptocurrencies to transfer FIAT value to their pockets, it stops being cryptocurrency while in their books.

luckily i'm not an american citizen because to be honest, their government is too complicated to take care of everything for its citizens. in my own country, the government only regulates crypto exchanges, not their users. so users are free to make transactions outside of the exchanges that have been recommended by the government, but the risk is that when users lose their money they cannot report this to the authorities.

but i think that this regulation is better. because users are still given the freedom to trade crypto from the exchange they want, because if they want to be safer they can use a regulated exchange, but if not they can use an exchange outside of that, but at their own risk.

in regards to "intentional witholding of your funds"

its a matter of fact and regulatory compliance that a regulated money service business CANNOT "take your funds" for whimsical/made up reasons of a business policy.. instead they at most without a court order can stop offering services within its business and request you withdraw your funds and be banned from returning after your exit
you wont see regulated exchanges withhold funds just for fun nor 'jus coz we can'


regulated money services only "take funds" when the receive a court order allowing them to take and forward funds to the courts for holding,
whereby the user then has to be contacted by the authorities to prove innocence to claim funds back
to avoid this. simply dont do anything listed as reg-flag suspicious via regulators guidelines MSB follow(dont do illegal crap)

MSB's only get a court order if they have found your financial activity to be of suspicious nature to a threshold level of triggering the business to report to authorities and thus the authorities using their own authority level guidelines if it meets their own thresholds get triggered to then seek further actions
thus your activity needs to meet a threshold of a threshold of suspicion to warrant further actions


its the unregulated CEX that would create business policies/service agreements that allow them to take and keep funds under private business terms
where you would then need to try to sue the business in court to prove their actions are wrong and get your assets back
(kinda hard to sue some as they hide corporate address behind proxy/virtual mail addresses)

best advice
research services you want to use, ensure you can locate corporations legal address and read their T&C's