Ok, so if the issuer just disappers with your fiat, you can do nothing about it, right?
Well, the centralized unregulated exchange (which is most of them right now) can always disappear too.
The difference is, when you have few centralized exchanges, they are easy to shut down.
When you have decentralized individuals, nobody can shut them down, except they can disappear on their own, just like centralized unregulated exchanges can do the same when they think they got enough and it's time to go to a beach
but then I am sure there has to be some sort of reputation system in place, that allows to record feedback about a certain participant, like on ebay for example.Those with higher reputation can charge higher fees....this way there will be an incentive to not cheat....if you are trusted them you charge more for your service.
or there can be a time factor included....as a specific node cannot withdraw funds for a certain amount of time or till the transaction is complete....can this be coded in??