I'd be not so quick to run to the government for help. The reason these systems are failing is simply that the the principles aren't used which are used in the crypto currency technology itself.

The crypto currency system is designed in such a way that all controlling is done by a vast network. If a transaction is tainted, the system won't accept it. And you can't hack all miners in the network. That single element is what makes it work. Exchanges are set-up as single entities, a website, where you have to send your coins to trade them. And that is where it fails. You have to trust the owners of this website. And as always are people the corrupt element in the system...

And that goes also for government or the layer above them: banks. You only have to take a look at the mortgage bubble that popped. Sending vast numbers of people out of their homes. All because of the greed of bankers.

The only way exchanging coins is going to work is by applying the same system that is used by the crypto currency system itself. Thus peer to peer transactions and a system of miners to validate those transactions. No people allowed as in-between and no central storage of coins.

The best solution would be if the systems itself where adapted for multi coin type transactions - between different blockchains - and using the existing system to send in buy/sell orders that can be picked up by other buy/sell orders.

And if that isn't an option and it has to be a website than there shouldn't be coins allowed in the system. Just the users buying and selling but making transactions directly to each other when a buy/sell match is made. Again peer to peer, directly from the wallet. And there should be rules as when a user may trade and how many coins the user may exchange. Maybe a rating system where users can rate each other when a transaction is made.

Bottom line: I only trust computers.

TFK