Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.
A lot of people don't trust themselves to hold onto their own funds. They figure the people running the exchanges are professionals and wouldn't do dumb things with their money. FTX showed that isn't the case. It's amazing to me that Sam managed to get himself more than 15 billion dollars in wealth and it still wasn't enough to keep him happy and stop him from doing stupid things with customer funds. It absolutely amazes me. The amount of damage that has been done to the industry by these selfish get rich with other people's money types is immeasurable. If the average person cannot trust anyone to custody their funds for them, crypto can't go mainstream. The same reason people keep their money in a bank instead of under their mattress.