Earlier quoted context omitted.
If cryptocurrencies get very "wild" as an "asset class", then the US SEC, etc. will make regulations and/or Congress will pass laws to calm it down. The powerful governments in the world won't let crypto be means for money laundering, tax evasion, moving lots of money across country boundaries secretly, undisclosed assets, inheritance and gifts without taxes, etc. It may be that the important, remaining, applications…
It is one thing to make regulations and the other to enforce.
We know a lot about this system because it got a lot stronger trying to stop the money flows for terrorism, drugs, and tax evasion.
Well, for the "regulations", one can be that the system will not exchange with crypto and will not work with people who do. There are already, call it reviews, of any relatively large transactions. If something smells like drug money, terrorism, large scale tax evasion, etc., then law enforcement can get involved, crash into a house or office a 3 AM, grab all the papers and computers, grab phone tap data, grab Internet traffic data, etc. and put together a case of violation of crypto laws and regulations.
There's a fundamental point here: Sure, on a small scale, the regulations are tough to enforce, e.g., cost more to enforce than get from the enforcement. BUT the fundamental point is, for any illegal activity to make or spend much money, a LOT of people need to know about it and, then, sure, law enforcement also knows about it and can take action.