I feel like I'm experiencing whiplash. When it's convenient, crypto is unregulated and unprotected. But for this argument it is convenient to refer to it the matter as fiduciary, which implies trust, and declare that the only amount which matters is USD.

You might expect to only get the USD equivalent back, but not for one minute does that make you whole. A lot of money was in fact stolen.

The USD equivalent would still be higher than before due to the USD value of the asset that FTX systems would be reporting - if they hadn't been taken down in a criminal investigation, through no fault of the client.

It's a protected security at this point, not an unregulated and unprotected. If someone stole shares of IBM I would be just as upset.

It seems like the government is interested in all the benefits of treating it as a security and none of the protections that people deserve

I'm not sure that's how I would characterize the situation. The government can certainly treat it as a security, and try to regulate it. But if you participate in an unregulated scheme, you get to keep the pieces when it breaks.

I don't think there's any one definition of being made whole here, and people could reasonably disagree on what that means.

Ignoring bitcoin entirely for a second, I might deposit $1000 in an (unregulated, let's say) investment account. Later that amount -- unrealized, of course -- goes up to $2000. But it turns out it was all a scam and the investment manager ran away with the money. I might think I'm entitled to the full $2000, even though that may have just been a number the fraudster typed into a database, not representing anything real. Or I might argue that making me whole means also compensating me for the lost opportunity cost of keeping the money somewhere else where I could have made, say, 10% in that time. Or I might just recognize that I was duped, there was no investment, my $1000 never actually grew, and that's all I'm entitled to getting back.