Doesn't crypto have the same problem, with money laundering and other crimes? If you lose money with crypto, there is no one to sue nor government insurance.
I don't see how that's the same problem? They are clearly separate, distinct problems.
There are obviously both advantages and disadvantages to both crypto and banking. As someone who lives in a country that has been through a lot of bullshit, I highly value the fact that the bank can't just take away my money.
The only difference is that crypto fraud is irreversible, and that the blame will be put on you.
Fraud is huge industry, the fraud models and attack vectors in the fiat world is different than in the crypto world. In the end wherever there is enough money, there will be fraud as well.