But sometimes you do. See: Cyprus in 2008

Exactly, also there was this bank that went bankrupt in the 1800s and everyone lost their money too!!!!! You can't trust the system!

2008 was barely a decade ago but if that comment made you feel smart good for you.

Plus this argument is ignoring that the way the banking system is protected from such failures is with taxpayer money, so you still end up losing some of it.

Sure but one bank went under in 2008 versus how many crypto exchanges that stole or “lost” deposits since then? The scale of issues is not even the same order of magnitude, likely at least 100 to 1 given how many banks there are and how many crypto scams there have been

Yeah, in shady tax haven jurisdictions. It's the wild west factor.

In other jurisdictions the banking system is protected from such failures with taxpayer money, so you still end up losing some of it.

That is, sadly, not how it works in many countries -- if the money is gone, it's gone.