If you have assets in any* exchange, get them out now. Using regulated exchanges defeats the whole point. Fiat transaction fees are lower / nonexistent compared to CC ones so if you want to gamble on the relative value of something just stick to the stock market, and if you want to send currency on something that is regulated by a government anyways, might as well use Fiat.
The only thing regulated exchanges do is profit by losing you value via fees and then some more via taxes while carrying risks of being rugged or having "your" assets frozen. Just... why?
Exchanges provide a lot of added value, at least ones that aren't run by criminals or idiots.
Wallet keys stored on a phone or laptop, or even a hardware wallet, are generally less safe than the reserve wallets of a major exchange. I can lose the device, it can break or be stolen, etc.
Writing down recovery phrases and stashing them in the sock drawer doesn't feel very safe either.
And if something happens to me, I feel quite sure that my family will get any crypto I have in my Coinbase account, but much less sure that they'll be able to recover any non-custodial wallets.
RE: personally stored keys are less secure ...this is very subjective. You don't "hand" your wallet keys to an exchange: you don't even have them. Meaning "your" CC is a lot like "your" USD in a bank: subject to taxes, send restrictions, asset freezes, IRS audits, and a whole host of other unnecessary and inconvenient crap. Being taxed on CC gains relative to the USD is ultimate hypocrisy. It's like being taxed on swiss francs or yen you hold if the exchange rate changes... except instead of an unlimited write-off for losses like traditional forex, the cap is $3000 to form a one-way YoY tax valve.
Literally nothing about the government's stance on or (severe lack of) understanding of cryptocurrencies makes any sense other than it definitely reminds me of good ole' Reagan: "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
RE: if something happens to you ...that is an excellent point. You wouldn't get this without an exchange, yeah. If subjecting yourself to all of the above to reap this benefit is worth it to you, that's a favorable tradeoff to make and one you definitely should.
The only thing regulated exchanges do is profit by losing you value via fees and then some more via taxes while carrying risks of being rugged or having "your" assets frozen. Just... why?