How can someone hold that kind of money in a centralised exchange? Not to be harsh, but the person typically got what he deserved. Coinbase is one of the exchanges that can easily freeze users funds once they suspect anything or the 3-letter government agencies ask them to do it.
Binance has 9 VIP levels (one Regular). If your 30-Day Trade Volume is lower than 1 million or you own less than 25 BNB, you are a regular user. VIP levels start from 1 Million 30-Day Trade volume / 25 BNB and go up to 4 billion 30-Day Trade volume and 5,500 BNB. What do you think, how many VIP users does Binance have? I'm simply wondering and at the same time I want to say that probably there are lots of people who keep millions of dollars in their trading account, When I check sell order on Binance, I often see more than 10 Bitcoin orders.
And I don't think that people who have hundreds of millions of dollars, millions of dollars , are any more stupid than we are, and they don't know what they're doing with their money.
Agree that storing coins on centralized exchanges is not a good idea and is not recommended. But I think they have their own reasons as well as our preferences are different. We should not impose our thoughts on others and should respect them, everyone has their own thoughts and choices.
Overall, each method has its own risks , no method is perfect. What if we store millions of dollars in a non-custodial wallet and accidentally lose the seed phrase? Many people have been in that situation and they have almost no chance of getting back their millions of dollars worth of assets.