> fraud is not even illegal
Just like all other non-bank fintech companies (like Paypal, Square, etc.), US crypto exchanges are regulated by FinCEN, the Bank Secrecy Act, and the Patriot Act, and are obviously legally liable if they try to commit fraud. Most other countries have similar money servicing legislation, and even if they didn't, fraud is still illegal in all but the least legally responsive jurisdictions. Committing fraud doesn't suddenly become legal just because your company is classed as a crypto exchange.
Now, just like there will always be a poorly regulated bank somewhere in the world, there will always be a poorly regulated crypto exchange somewhere in the world.
> Need an example of crypto-fraud? The most widespread example is Tether, USDT. The idea that USDT is backed by USD is a well known joke. No one really knows the full extent of this fraud but all indications are it is one of epic proportions.
>
> Yet the exchanges maintain the $1 peg for USDT.
USDT is a Bitfinex product. If you believe that "the exchanges" other than Bitfinex are in on Tether, I'd like to hear your reasoning. Most likely, the USDT fraud will collapse at some point, and the rest of the exchanges besides Bitfinex, along with the rest of the crypto market, will go on business as usual after a short market scare.