Well, rule #1, never convert your bitcoin back to fiat. The banks and governments wants a cut of this. If you are trading, convert everything back to bitcoin, and keep it in this currency.
fiat is the most insecure thing ever, not because of theft, but because of governments. I'ts like their last grasp before we become free
Please let's not be so 100% sided but combine a little bit of both.
Almost everyone is worried about crypto exchanges doing stupid things or going "hacked" or delaying withdrawals of verified accounts by a few weeks, while at the same time the same users going against regulation. Doing this is very stupid.
A little bit of regulation is actually healthy.
For example if the govs said that is mandatory to follow some very strict security rules when it comes to handling cold/hot users coins then this is very beneficial for us the traders/investors because the exchange will be audited to see if they don't breach some common sense procedures (by intention or mistake). Otherwise you will see headlines of another exchange "hacked" (maybe by an insider who works there and exploited a backdoor that he left open). Of course you can't make it 100% bullet proof, but at least you reduce the risk.
What the banks did in this case is common sense. Otherwise hackers/crackers, human traffickers, criminals will flourish.
I prefer to pay a small cut to the govs in order to be assured that the criminals will not affect my affairs.