It's basically the opportunity cost of being able to trade quickly (xc->bank->xc would take 10+ business days) versus the risk of having co-mingled funds in an

It's basically the opportunity cost of being able to trade quickly (xc->bank->xc would take 10+ business days) versus the risk of having co-mingled funds in an unregulated exchange. The reason banks are regulated in the US is because the banking system pre 1930s wasn't too dissimilar from crypto now.