Government regulation is both good and bad. The bad news is that there are restrictions, and not everyone can enter the crypto-currency market. The good thing is that government regulation is the protection of citizens from the possible loss of all capital.
Yes. The government's refusal to circulate Bitcoin is also a way to protect people from fraud, but only to a certain extent. How real? There are also scams involving electronic money, and the government can not do anything to protect people, even if the money they lose is not a problem. I think the best way to protect people is to make the law as a legitimate tool for better management of Bitcoin-related activities.