Is there a crypto exchange that do this correctly? Isn't the idea of an ideal exchange go against the philosophy of decentralization? If exchanges are not regul

Is there a crypto exchange that do this correctly? Isn't the idea of an ideal exchange go against the philosophy of decentralization? If exchanges are not regulated, what incentive do they have to handle assets correctly anyways? And finally, if regulation is inevitable, why not just go with the traditional financial system for better safety and security?