The problem is the crypto community’s skepticism of proven financial safeguards. Large financial systems are centralized for a reason and they seem intent on finding out why by hitting every bump in the road at full speed.
The problem is that regulators "confuse" that (or pretend to) and any regulation that comes out hurts the users, and the DeFi space, instead of focusing on centralized business like FTX that are outright stealing users funds.
Also what FTX did is without a doubt already illegal, it's not like it's some kind of loophole or legal thing they did.
Arguably, fractional reserve banks “steal” customer deposits to invest and pay interest in exchange. They have a very particular license from the government and are monitored (and insured) and rightly so - they are very dangerous.
Crypto is immensely more centralised than the American banking system. That’s what makes it resilient. Every wallet’s state is always globally known. Compare that with the series of subpoenas one must serve to learn what’s in whose bank account.
Might want to look into the rug-pulling with shitcoins, NFTs etc.
That is far more insidious since it is targeted at young adults/children by influencers such as Jake Paul, Lil Uzi, David Dobrik etc.
But... they can also be programmed NOT to allow terrible human behavior. Banks do not have this feature.
So yes there maybe terrible human behaviour at times but very quickly it results in either (a) people being fined or going to jail or (b) laws improving to prevent it e.g. KYC/AML.
Also as someone who works at a bank there is a lot of code which governs what people can and can't do.
Maybe, if you are a god tier programmer. On a long enough timescale the probability of your crypto project ending up on the rekt.news leaderboard is 1.
Yes, because that's where the actual value is at the end of the day. Regardless of how much people want to pump crypto, when push comes to shove, the recognized value of crypto for the vast majority of people is it's conversation rate to fiat currencies.