He may be talking about how they are using fractional banking or whatever its called. except, banks are allowed to do that and exchanges are just stealing/betting.
I view this as an implicit tradeoff in the system. Banks have to comply with an entire bevy of regulations that can be very costly. These range from protecting customers to making the banks themselves less risky. It even involves delivering on other government policies around housing, community reinvestment, or anti-money laundering. And it is true that banks have special privileges like being able to create money, taking a margin on government programs like the PPP, or even outright bailouts. Particularly since the GFC, you can view banks a lot as a utility in this way.
I recall going through orientation at my first employer out of college. The CEO, Brian Moynihan, was asked a question about the Dodd Frank regulation being fiercely debated in the Senate. I was surprised about how supportive he was of the bill as he spoke about how engaged they were in it.
If crypto exchanges want more US government protection, they will have to welcome more of this regulatory environment into their businesses. Particularly on the AML/KYC front. Ironically, the head of FTX seems to have realized
this and caused quite a stir in the community. This hurts returns and freedom, but it is part of that implicit bargain.
There is a dance of regulatory capture and government overreach into those firms. Crypto firms and most of that community finds that whole thing odious. They are not wrong, but it means these exchanges are very risky when the tide goes out. I am not sure how domestic exchanges are going to attract customer funds without how some of these safeguards. Until the next bubble at least.