You're not regulating the 'unregulatable'. BitInstant was a FIAT<->BITCOIN conversion business. It was not wholly anchored in Bitcoin and therefore assertions that no laws can be brought to bear on it are likely baseless.
Bitcoin maybe make-believe money but US dollars are not. When people are out-of-pocket on the scale that BitInstant was running; things like class action suits are an almost inevitable ugly consequence.
What I was saying was that the only way I think you can "regulate" is to sue someone in small claims court. How is the government going to control the flow of bitcoins? It does not seem possible.
also, if your quotes were used to imply that I was not using an actual word, my source is:
http://en.wiktionary.org/wiki/unregulatablehttp://www.reddit.com/r/Bitcoin/comments/1kg0ok/what_bitcoin_laws_or_bitcoin_regulations_could/