Exchange is beneficial in terms of trade, it offers free and suitable trade especially the reputable exchange. The reason I mentioned trade is because we can’t store our coin in an exchange. I understand op is trying to create a debate but aside selling I don’t see a valid feature an exchange can offer, for example an exchange is referred as a market space we buy and sell not store.
People who take much risk and decide to store their coin probably they feel exchange wallet is the best they end up getting scammed, a binance user shared a scam experience story linking with gmail hack and how it all happened it’s best we don’t create benefits we can’t handle.

Trusting exchanges is the most important factor for why many of us consider storing Bitcoin there instead of using non-custodial wallets. But here's the real question: are there exchanges that will truly take full responsibility? If there were, I bet most people would choose that option. Unfortunately, it’s a tough call because it’s hard to believe them after hearing so many stories of lost funds and customers left empty-handed. It is a different story when you have control over your own wallet, where you can be confident that your assets are safe.

For regular traders, using an exchange wallet might be the way to go, but if you’re in it for long-term holding purposes, a hardware wallet is definitely the better choice.

Keeping it on an exchange is easier to dump it instead of keeping it on a hardware, pulling out that from your drawer, connecting the USB to the device and so on.

You're right. Everyone is so serious and I understand that we all knew that keeping it on an exchange is risky. But OP is trying to twist the thing here for the sake of discussion.

Maybe I can blame exchange if my BTC got stolen ? 

I think this is one of the reason why some people just stick with exchange, they can blame anyone but themselves since it's "not our privkey not our money" and the regulation might be in the favor of us the customer, even more so if the exchange is insured + the exchange have SAFU funds.

also, making sure storing 12 phrase word is a pain, what if our computer got infected by keylogger and it can steal our 12 phrase word at some point? this means we need to take care the security of our PC as well from virus, added more complexity.

You can complain, blame and even sue them to the authorities but the more important thing is will you get your property back and how long will it take? It took Mt.gox victims over 10 years to get their bitcoins back, FTX victims waited 3 years and although there was news that they were planning to be compensated, it was still just news. Do you want that to happen to you?

Yes, storing bitcoins in a non-custodial wallet also has certain risks, it is not completely safe. But we have complete control over our assets and our money is only at risk if we are careless, not because of the carelessness of others and we are the ones who have to suffer the consequences of their carelessness.

Indeed, maintaining wealth is more difficult than getting it, so maintaining bitcoin ownership, there will be risks when choosing a third party as an alternative, as well as if we store it ourselves, memorizing 12 words is quite difficult, but it can still be tried by storing in other fields, try our minds not to be too extreme in things that might happen, surely you can keep it well, talking about PC is better you don't store it there, you store it in the bookcase in the safe is more than enough.

If on the exchange of course the blame is the exchange, anything but we ourselves are negligent in maintaining our accounts.

I mean as others have mentioned there really is no debate here.  I did see a recent interview with Bobby Lee (Charlie Lee, creator of Litecoin's brother) where he said "sure its 'Okay' to leave your coins on an exchange, but then he went in to the mountain of reasons why leaving coins on an exchange is not a good idea, and in fact it's the worst place one could possibly leave there coins.  I just wish more people understood this.

Others say it's because you can earn by staking some of your coins, it's comparable to also like storing it in bank in time deposit as well. And I do agree that we can't really defend why we should store our Bitcoin on exchanges because it has precedence already. As early crypto exchanges existence, there has been a lot of hacks already, and the biggest example is Mt. Gox, the ghost of it still haunts us up to this day. And it's not that easy to store our Bitcoin in exchanges as well, you have to pass KYC and then you also have to be technically inclined, like setting 2FA or having a hardware like Yubikey to bind to your account. So I'm sorry, there are not debates or arguments here, it's really a bad practice to store our Bitcoin on exchanges, period.

This is the actual fact that must be emphasized, not only discussing the myriad of reasons why coins are abandoned on the Exchange.

More hacks happen to Exchange not because of security errors, but because of the greed of the Exchange owners themselves.
We can see in the FTX incident that has made everyone suffer over the past few years,
until finally they will refund their users but it is also still unclear how much they will receive, due to the price difference then and now.

There are so many problems on the Exchange that it becomes the worst place to store your assets.
I'd rather spend $200 to buy a Hadrware wallet than store $1000 worth of assets on Exchange.

The exchange is a place for trading and is only used temporarily when trading, there will be periodic withdrawals that need to be made to minimize the risk of loss.
Although there is now Secure Asset Fund for Users of a hack (SAFU), it will not guarantee completely.

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I also found some facts that happened to the Bingx Exchange hack some time ago, on September 20, 2024 to be precise.

Hackers have hacked 360 Altcoins on the Bingx exchange including many memecoins and of course I have one memecoin, namely $KOKO, KoalaAI.
The hacker then sold everything into ETH and BNB.


https://x.com/wiseadvicesumit/status/1836952370909172050

In some announcements on Bingx, they said that all the assets affected by the hackers have been returned,
but in fact there is no return of anything and they ignore it.


$KOKO lost $300k worth of coins in the hack, but there was no return whatsoever to recover its price back.
It may also happen to other affected coins, but they seem to have solved the problem, yet they open up a new problem.


https://x.com/KoalaAIvip/status/1843200758285533267

So, there is already a strong reason not to store the Coin on a centralized exchange,
even though there are some SAFU guarantees that in the end it will not work for every CEX and BingX as the CEX is already committing a lie.

Yeah, Bitget, FTX, you name it - it's your responsibility whether to store your assets or not because many things can happen at any moment and there is no certainty that your funds will be safe or returned in case of emergency.