You may have heard of James Howells and his $11 million plan to find a hard drive with $181 million in Bitcoin. That is a risk of self-custody. His chance of finding his bitcoin is actually good.
If you had bitcoin held on FTX, there is no amount of money or time that will bring those coins back. They are gone. You have a 0% chance of finding those bitcoin.
Even in the worst case scenario, self-custody is better than an exchange.
Not your keys, not your bitcoin.
I think that your title contradicts your forum thread. Saying that self-custody risks "outweights" the crypto exchanges risk means that having crypto in your own cold wallets is riskier than leaving them in a crypto exchange. Is that what you are trying to say?
I think that having coins in a cold wallet is way less risky, if you know what you are doing and you have enough backups.
Putting your life savings and your trust into a centralized crypto company is a recipe for disaster. It doesn't matter how trustworthy the crypto company claims to be.
I don't know anything about James Howells and his 11 million USD plan. Spending 11 million just to find a hard drive that might be damaged and cannot be recovered seems like a very risky idea. Who is going to "invest" 11 million dollars into such plan?