If there is one thing we all know is that socalism sucks diseased horse cock. Socialising funds is just as bad. FIat holder shouldnt be bailed out by wise crypto holders
Holding crypto on centralized exchanges has historically been a great way to lose all your funds.
Fiat holders could have (and did) say the same thing when Bitfinex lost 120,000 bitcoins. They said "screw the BTC holders, let them have their losses and give me my money." If Bitfinex gave BTC holders 100% of their loss and USD holders no losses, much of their userbase would have left the exchange.
The same logic probably applies here. The exchange needs to try to please the most people; they can't do that by leaving crypto holders mostly whole and screwing fiat holders.