As for surveillance and control, it obviously would make it easier for the government of that country to snoop in people's finances but it is better than having another government of another country do it!
True, anybody who has been using centralized exchanges shouldn't even be worried about the government snooping in on their finances, the U.S. government have been doing it with a lot if centralized exchanges and custodial services, even shutting some of them down and prosecuting their developers and owners.
So if you are using a centralized exchange run by your own government, it may even be better than using one that is under the feet of the U.S. government