cryptocurrency is risk and it's a threat to the government because of the decentralized nature it was created for, regulations is only the solution to reduce such risk by the authority.
The risk is something that cannot be changed as it will always be there. Even with regulations, that will never change the government from still feeling threatened about the whole decentralization aspect of things. They have always been in control, and they want to keep being in control, now this is taking that control away from them and even with regulation, there is a limit to the control they can have, so in a way, being threatened will remain for them.