Exchanges have failed repeatedly, taking customer funds with them. In most cases signals were available beforehand to anyone looking.
Regulation and jurisdiction
Where is it registered, under which regulator, and what does that regulation actually require. Exchanges registered in jurisdictions with minimal oversight offer minimal protection.
Being available in your country is not the same as being regulated in it.
Proof of reserves
Whether the exchange publishes verifiable evidence that it holds customer assets. Cryptographic proof of reserves lets you confirm your balance is included in the total.
An attestation without matching liabilities proves little. Look for both sides.
Segregation of funds
Whether customer assets are held separately from company funds. Several failures involved customer deposits being used for company purposes, which was possible because they were not separated.
The warning signs
Withdrawal delays or new requirements appearing. Unusually high yields on deposits, which have to come from somewhere. Opaque ownership. Aggressive marketing. And the absence of straight answers about where assets are held.
The practical approach
Use exchanges for exchanging. Move anything you intend to hold to a wallet you control.
That single practice makes exchange failure an inconvenience rather than a loss, and it is the lesson from every collapse so far.
The caveat
General guidance on evaluation. Not a recommendation of any platform or any activity.