One of the reasons governments point out for not legalizing bitcoin is the fact that is prone to scam and not regulated. The government will want to protect his citizens from anything not regulated and anything that's likely to be defraud from. You will agree with me that that's alot of scam activities going on with bitcoin, there alot of news going on with bitcoin scams everyday which the authorities are always aware of.
All these continue to happens, the government will still have reasons why they will not approve and legalize bitcoin. As they will always talk about the disadvantages aspect of cryptocurrency and neglect the greater benefits cryptocurrency brings.
At this point, there is no going back truth be told that what has been done cannot be undone. I have been a victim of scam before and anyone who has been in that by any form whether thorough investment, exchange scams, gambling site crash or an outright scam would want to see that something is done to reduce all of this atrocities committed because of the 'anonymity' that surrounds bitcoin.
Personally, I think the discussion has gone beyond whether its the right thing to do or not. What we should be concern about is how will the regulation be implemented? Today we have various degree of KYCs asked by service providers depending on the direction they feel they want to torment their customers without anybody calling them to order that is where we need regulators to hold them accountable for the information they collect and how they should go about its use.