[seibelj]

You are 100% right that the regulators have (and will continue) to come down hard on entities that violate these laws.

But crime is endemic, even in the developed world, and has been long before crypto existed. On the internet itself, TOR allows all manner of illegal IP packets to be transferred, but we have not banned the internet itself.

I know this is a tired argument that is oft repeated, but this is because it's true! We can't ban cryptocurrency simply because it can be used for crime. Society accepts that technology can be used for good or evil.

[schoen]

A conceptual difficulty is that cryptocurrencies often intend to make financial technology truly private and permissionless. That goal itself is at odds with lots of existing regulatory systems, and many cryptocurrency developers have emphasized that they want to help people transact outside of those systems.

If you don't want to help people have more privacy, autonomy, jurisdiction-independence, etc., than existing financial systems, but just want to be faster and more programmable, then you don't need cryptocurrency. Instead, you could create a centralized intermediary that implements a system with the properties you want, and simply prepares to help governments {track,seize,freeze,blacklist,reverse} {users,assets,transactions} to the extent that regulators would like. This centralized intermediary will probably be faster, more resource-efficient, less prone to exotic attacks on consensus mechanisms, and more scalable than a decentralized cryptocurrency. It could also be moderately innovative compared to some previous financial intermediaries.

What are the properties that, say, Bitcoin has tried to purchase at the (expensive!) cost of completely decentralized proof-of-work consensus? They include the inability for a centralized authority to shut down the system, or exclude particular participants, or block or reverse particular transactions, or override or violate the predetermined rules for what constitutes a valid transaction, or condition participation on compliance with any particular bureaucratic formality. They include letting miners be anonymous. If you don't want those things, you could more efficiently replace all of Bitcoin or Ethereum with any of several of multi-writer append-only distributed data structures with, for example, a publicly enumerated set of identified, trusted consensus verifiers.