They scare of scam exchanges will be reduced because the government making sure to secure exchanges in their country.
Governments do not make sure to secure exchanges, they give you the impression that you are secured by setting bogus regulations and entry barriers to certain industries. The objective of Bitcoin is to give users financial Independence rather than depending on third parties, using centralized exchanges means you are submitting your assets and personal details to a central server, from where it can be stolen or sold.
But to gain the confidence of other users, we need the existence of these centralized exchanges, which are under the government regulations. We know that bitcoin should not be in any way tied to a centralized organization but we are already in the stage of massive adoption. And to welcome this adoption, government intervention is inevitable. This I believe, we can't escape from. We don't know where will our details will end up with but this is the stage where we need to accept that centralized platforms are already here to support adoption.