A possible solution for this problem could be a system like the one used by banks. Where everyone is obliged to give a proportionate amount of deposit to the central bank and these funds serve as cover for any disputes that may arise. This would perhaps encourage exchanges to take more careful care of their users' entrusted funds.
Few days ago, the issue of Kucoin was circulating about some of the exchange executive involvement in money laundering act, if not for SEC, perhaps we could be talking of another FTX right now which could have impacted the market negatively considering the size of Kucoin in the market.
Don't confuse accusations of money laundering because they didn't have rigorous KYC with misappropriation of user funds.
Do you think we can get to a point where we can say an exchange has spent over 10 to 20 years without any drama.
Did you hear about Bitstamp?
There were no significant dramas related to them. Bitstamp was founded in 2011, 13 years ago. So it's possible