To me it sounds like an exchange that answers to no one decided to just steal 30%+ of it's customers deposits and replace it with a made up garbage coin and an iou. Likely no hack ever occurred for real.

Nice, no regulation you say, now you pay for it! Bitcoin has it's flaws, huge one's and this a perfect example. You either want regulation or you don't but you cannot have your way and feel the gov. or authorities owe you something as well.