“Not your keys not your coins” is a mantra in crypto for a reason. If you deposit your tokens into an unregulated and unaudited bank promising above market returns from their opaque strategy, there is a high likelihood you’ll eventually run into trouble.
Obvious solution is to encourage more regulatory framework around companies that claim to be custodial banks and investments. More audits, stable backings, and all of that.
While I agree with the first part I don't see what it would change for the second: what is happening with Celsius is a good old bank run, and they have only like 10% liquid reserves. How long would it take to a well regulated bank be able to make all their assets under management liquid?
Their "protections" are FDIC, which is basically a government insurance fund. With regards to Celsius, we don't know if they lost user funds, or if they are having a liquidity crisis. There's more detail here [0], but I think it's certainly possible that they do have user funds and simply cannot handle withdrawals for the majority of their user base all at once despite having the funds (much like a bank).
Obvious solution is to encourage more regulatory framework around companies that claim to be custodial banks and investments. More audits, stable backings, and all of that.