Yes.It will reduce the criminal activities by regulating cryptocurrency.After regulations of cryptocurrency, government will come to know the transaction of cryptocurrency.If the criminal buy bitcoin in regulated cryptocurrency,they can be easily captured.In cryptocurrency,you will get loss .Only if you buy a potential less shit coin.
Regulations will certainly affect criminal activity initially, but the only thing it's really doing is making sure criminals become more creative and less obvious. Criminals are always one or two steps ahead of authorities.
Noob criminals will get punished for their stupidity, where the smarter ones become more advanced with everything they do. Why do you think some cloud mining schemes manage to run for years?
The most obvious schemes have proven to fail much sooner than those who put effort in making themselves look as legit as possible. Promising massive returns is unsustainable and draws too much negative attention.