Quite likely that governments will force exchange operators to get appropriate security. Hell if I had the keys (or were in a position to be used as "leverage" for them in a kidnapping) to a Bitcoin exchange, I would surround me with a bunch of ex-military guards.

Now (depending on the country) how do you trust the ex-military guards, if what they are guarding is worth far more than their salaries?

Be in a country with the rule of law.

Structure things so if they betray you, they have a very high chance of getting detected and needing to go on the run - e.g. access control records, CCTV and whatnot.

Then hire guards who would have to sacrifice a lot if they went on the run permanently. e.g. guards with partners, school-age children, extended family nearby, friends, and community ties like membership of voluntary organisations, churches or clubs.

While that sound smart and plausible, I would assume that there is some solution to that problem, otherwise how would private security work at all?

A security guard selling the Mona Lisa has to figure out how to get rid of it. Bitcoin's quite a bit easier in that regard.

This is bullshit, exchanges with the most rudimentary technology will not keep their funds under a single private key held by one single person at all times. Multi-sig exists.

> Multi-sig exists.

Multi-sig does not prevent anyone from kidnapping me and distributing a video "sign us all your btc funds or this dude is going to get tortured".

Well sure, but the executives of the exchange signing that transaction would actually be a violation of the law, because they are custodians of their customers' funds and not all customers may agree in saving their executive.