Absolutely the government is to blame, in just the same way if companies started pumping a new pollutant into the environment and the EPA did nothing about it for 14 years.
Was there a public, premeditated house breaking plan that ran for years? If so, it clearly was a failure in the system to not put it out in its infancy.
Not really? Cryptocurrency has never been directly about causing people harm, it's simply an experiment in alternative digital assets. Now, I think that's a horrible idea, but I also don't think it's the government's job to regulate it any more than it's their responsibility to monitor Fortnite's V-Bucks economy.
Why should the government intervene here? It's in the mutual interests of crypto holders, crypto detractors, exchanges and the Supreme Court to not treat all crypto as a security.