A normal exchange is a company which exchanges fiat currency with cryptocurrency, and vice-versa, taking a small fee in the process. And that's it. Nothing else. I believe these exchanges hardly need to be regulated, because they don't store any funds. You make a deal with them, and when it's over, the customer relation is over, everything's terminated.
Besides that, there are exchanges which offer margin trading, which propose lending and borrowing cryptos, and various other high risk activities. Those exchanges need strong regulations, to protect investors.
So because one exchanges your money and the other allows you to trade make them different in the view of regulation? Well, I don't agree with you, neither do I think any serious government will agree with you. Maybe the poinst below woudl chnage your vew on this:
1. Have you forgotten that it's human beings you are dealing with, crypto aside, it's a matter of time before they would hide under that to launder money.
2. When they are not regulated, how do they sincerely pay taxes when they are making money from people?
3. What if they just disappear with the customer's money?
4. Even if they didn't disappear, don't you think they can still be cheating people when they are answerable to anyone?
Regulation is not always bad, it protects the right of people too.