This might be the best solution to the "Not Your Keys, Not your Bitcoin" issue + trust in exchanges issue and it may actually stop the need for additional regulation. Correct me if I'm wrong, tell me if you have a better idea.

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This might be the best solution to the "Not Your Keys, Not your Bitcoin" issue + trust in exchanges issue and it may actually stop the need for additional regulation. Correct me if I'm wrong, tell me if you have a better idea.

I've worked at a few different centralized exchanges over the years and I've seen some interesting practices that are meant to minimize user error or the user become a victim of a hack.

Having an EULA that says, "We own your crypto if it is on our exchange. You do not own your crypto if it is on our exchange." is not good enough. I have a better suggestion.

The general idea: Regardless of the exchange, if you have a sum of crypto that is above the minimum withdrawal limits on the exchange, then the exchange is obligated to give you a notification when you log-in. This notification is required to be displayed on screen for 10 seconds. The user cannot close the notification for 10 seconds. The notification will clearly display a message that says, "You have a significant amount of crypto-assets on our exchange. If you do not withdraw these crypto-assets to your own wallet off, then you do not actually own these crypto-assets, and they may be susceptible to theft by nefarious actors. We may or may not be held responsible for theft of your crypto-assets depending on where you live. Please read more information here (insert link) about how you can safely store your crypto assets and click here (insert link) to see examples of previous incidents where users lost funds held on cryptocurrency exchanges."

The proposed notification above will appear not more than once every week upon user login and not less than 4 times every month a user logs in. The users of these exchanges then wouldn't have any excuses or logical legal recourse if they lose funds on such an exchange. Last but not least, I propose that this notification would appear if a user has an amount of cryptocurrency that is above the minimum withdrawal amount on a centralized exchange.