Well I strongly believe you should never leave too much cryptocurrency in any exchange as you are leaving yourself to vulnerabilities that could be easily prevented with hard wallets, USB...etc. The vulnerabilities can be the work of internal or external hackers and believe me hackers are only going to grow.
I see exchanges as a quick way to buy cryptocurrency because I'm not a miner. The only thing that you have to be cautious about is the information you are giving them about yourself. Use a bank account/debit card you only use for cryptocurrency or use one that has very low funds. I have several bank accounts for this reason. It may seem paranoid but if you were ever robbed you won't feel like an idiot.
When I try to simplified my understanding of the blockchain technology behind STEEM I don't worry on the legitimacy of it as I have never spent any money buying STEEM. Because you can earn it through writing posts (posts of which id written on Reddit for free anyways and only get points for), I don't see a reason why not just continue to work for it. It's no different than YouTube. When I studied YouTube, you don't really start making money until you get 1 million views and before that YouTube makes a lot of money from advertising ads . There's always a give and take especially for something that's created more extensively. Seeing how steemit is growing I don't see it going anywhere.
Thanks for your info. I too have my fiat holdings spread across several banks, even though it's just a small total.
BTW -- I got deep into literature on the Howey test today, and I think I was wrong about BTS likely to being declared a security. @Dan and his dad have done a clever job of wrapping management into the BTS holders in a diffused way. Thus SEC is going to have a hard time claiming that there is one group holding the security and a separate group out their doing the work to bring profits to the security holders.
Unfortunately, Steem Power and Steem Dollar seem to be in a grey area. It's only grey though; because I think @Ned is going to argue that it is the work of the Steem Power holders that is creating and distributing their profits, and Steem Dollars are largely earnings for posts written, etc.
One thing to note is that when SEC disagrees with you and you lose the case the feds get the right to "seize assets". So if @Ned loses we will not have a chance to simply power down our SP; because it will be taken away.