Let's say I start an exchange to trade magic beans. The beans are worthless, but lots of people like trading them. In my terms of service, I say I won't use user funds for anything else and won't rehypothecate user beans if posted as collateral. I claim to make money off fees. Then I do both, lose all the money, and people lose billions of dollars---which they realize when they ask for their money back. You may think magic bean trading is dumb. You may think the people trading them are dumb. But what I did would still be a crime, and calling it a crime doesn't necessarily mean you're delusion about beans.

Put differently, it sounds like you think people who put money into FTX are dumb. Fine. But the law still protects dumb people, as it should.