Though its easy to see why governments would want to regulate the movement of digital currencies, the reality of doing so is much harder. A lot of wallets have no identification to them and rest on a server in a third party country. In the case of offline wallets in devices such as the Ledger Nano, theyre not connected to any network.so is it possible to regulate ?
They can only regulate cryptocurrency when you exchange it to fiat currency or you buy cryptocurrency using fiat. They regulate those exchangers and required KYC to those people who use the exchangers.