You have that risk now just using banks. People have gotten accounts locked for too much PayPal or Zelle or wire transfers from legit sources that were for some reason flagged.
Absolutely, but with banks there is usually a clear route a user can take to contest the decision and gain control of their money again, and a clear legal process they can follow should the bank continue to decide against them. With centralized exchanges there is no clear process at all, many exchanges seem to be able to get away with doing whatever they want, and I'm not aware of any individual who has successfully taken a centralized exchange to court for locking them out of their account or confiscating their coins.
-snip-
I unhid that reply from franky1, just to see what you were replying to. It's just a long winded way of saying the same old tired argument that you only need privacy if you are a criminal, which as most people know is a completely nonsense argument:
I don't need to spend a lot of time dismantling the "nothing to hide" argument,
because it is already widely discredited. I will share one of my favorite quotes on the topic though:
The old cliché is often mocked though basically true: there’s no reason to worry about surveillance if you have nothing to hide. That mindset creates the incentive to be as compliant and inconspicuous as possible: those who think that way decide it’s in their best interests to provide authorities with as little reason as possible to care about them. That’s accomplished by never stepping out of line. Those willing to live their lives that way will be indifferent to the loss of privacy because they feel that they lose nothing from it. Above all else, that’s what a Surveillance State does: it breeds fear of doing anything out of the ordinary by creating a class of meek citizens who know they are being constantly watched.